According to a new study by the Alaska Housing Finance Corporation (AHFC), buying a home in Alaska has become more difficult for residents. Home prices are now higher than they were at their peak in 2022 and 2023. In addition, mortgage rates have increased by more than 50 percent in the past six years.
Between 2018 and 2024, the average monthly payment for home loans in Alaska, including the principal amount and the interest, went up by 52 percent, according to a study published on June 19. On Wednesday morning, Newsweek called the Alaska Housing Finance Corporation (AHFC) for their comments on this finding.
Rising mortgage rates are expected to add to the challenge of buying a home. These rates will make buying homes even harder for many people in the state. This issue comes on top of already high home prices, making it even harder for potential buyers to afford a house.
Recent information from Redfin shows that the average home price in Alaska was $388,400 in May. This is a 2.2% increase from the previous year when the average price was $363,000. Anchorage, the biggest city in Alaska, saw the fastest rise in home prices among the state’s metropolitan areas. The prices of homes in the city went up by 3.8% in May compared to the same price it was this time last year.
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Usually, when a commodity is bountiful in the market, its price reduces. However, there are exceptions to this rule, and the housing market in Alaska is one of them. Despite a significant increase in the number of homes for sale in Alaska over the past year, prices are still rising.
In May, 2,230 homes were on the market, 19.8% more than last year. New listings also went up by 21.3% compared to a year ago. However, the average time to sell these homes is just two months. For the market to benefit buyers, there needs to be about six months’ worth of homes available, but right now, it’s much lower than that.
Renting in the state has also become more challenging. Since 2018, the average rent has gone up by 24%. This year, the average rent is $1,325, compared to $1,250 in 2023.
Experts from the Alaska Housing Finance Corporation (AHFC) examined rent changes in seven communities. They found that rents went up in all of the following areas: In Anchorage, rents increased by 7.84 percent, and in Fairbanks North Star Borough, the rise was 4.17 percent.
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Juneau saw a 3.85 percent increase in rents. Kenai Peninsula Borough had rents go up by 4.71 percent. Ketchikan Gateway Borough experienced an 8.41 percent increase. Kodiak had the largest rise, at 20.83 percent. Lastly, Matanuska Susitna Borough saw a 6.38 percent increase in rents.
Daniel Delfino, the director of planning and program development for the Alaska Housing Finance Corporation (AHFC), was interviewed. He explained to Alaska News Source that the housing situation in Alaska is quite complex, and many factors are in play simultaneously.
According to Delfino, it’s no longer possible to pinpoint a single cause for the housing challenges people are experiencing. He noted that Alaska is costly for building homes because most communities face high construction costs. The pandemic and its aftermath further complicated things. Inflation and increased interest costs for land have also made these housing challenges even trickier to tackle.
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