There seem to be three main causes of the split in the market. The first is that affluent families continue to do better than others, thanks to healthy income gains and a rising stock market. “To some extent, it is the rich getting richer,” Andrew LePage, an analyst at DataQuick, explained. “The folks who don’t rely solely on a weekly or monthly paycheck seem to be doing better.”The upper end of the market has also been helped by an influx of well-off foreign investors whose buying power has grown with the recent decline of the dollar. Hard as this may be for an American to imagine, New York, San Francisco or Miami can now seem like a bargain, compared with London, Moscow or Sydney. Jason Haber, an agent with Prudential Douglas Elliman in Manhattan, said he had recently taught himself how to convert square feet into square meters — you divide by 10.8 — because of all of the international buyers traipsing through New York apartments.
Finally, both the recent rise in interest rates and the problems in the mortgage market have had a much bigger effect on low-income and middle-class buyers than affluent ones. It’s become harder to get a subprime mortgage, while the uptick in interest rates this year has added about $100 to the monthly payment on an average fixed-rate 30-year mortgage.