Are ‘snow birds’ going extinct?

With housing costs sky high – and wages not keeping pace – fewer people can afford second homes.

NerdWallet Housing and Mortgage Expert Holden Lewis says it also means a long-standing personal finance rule of spending less than 30% of your income on housing is going out the window.

“About half of Americans are spending more than 30% of their pre-tax income on housing – so that’s both renting or home ownership,” says Lewis. “Renters tend to be even more cost burdened than homeowners.”

He continues, “There are some people who are paying more than 50% of their income just for housing.”

With housing costs as high as they are, the idea of purchasing a second property – even if you plan to rent it out when you’re not there – is becoming out of reach, even for high earners.

“There’s really not – there hasn’t been a measure yet of how these higher home prices and how these higher mortgage rates are effecting second home buyers, especially the ones who plan to buy a place and rent it out for part of the year,” says Lewis. “But it kind of, common sense tells you that you have to be really cautious nowadays.”

He continues, “Because there are so many cost-burdened households, that means that there are just fewer people who can afford to take an expensive vacation and renting a house, you know somewhere from a week to a few months.”

Holden tells me, because homeownership has become so unaffordable, homes are sitting on the market for longer.

Because of that, it’s possible sellers will be forced to lower prices in the coming months.

But, we’ll have to wait and see.