Even with the expected rate cut, “affordability in Merced is fairly poor,” said Dr. Rowena Gray, assistant professor of economics at the University of California, Merced, because home values have increased dramatically since the pandemic while incomes have not.
Gray said the value of homes in Merced continue to rise, even while values drop in other parts of California. Ahead of the Federal Reserve’s announcement on Sept.17, she said she would probably wait for the rate cut if she were a homebuyer, because current prices and rates are so high.
This highlights a concern that Gray raised that while there are plenty of homes being built in Merced, she worries they aren’t the type of homes people are looking for. Her own graduate students, she said, typically want to live alone rather than with roommates. On the other hand the population of older adults is growing rapidly and “there’s more singles basically on both ends of the … life cycle.”
In addition, Gray said that she also expects building prices to go up due to tariffs on materials and that restrictions on immigration will increase the price of labor.
For the full Merced Sun-Star article, please click the link here.
