Rising mortgage rates in Anchorage raise fears of foreclosure

There is currently a growing housing crisis in Anchorage, Alaska, where rising mortgage rates, coupled with inflation and supply shortages, are making housing increasingly unaffordable for many area residents.

The Alaska Housing Finance Corporation (AHFC) has conducted a study showing a 52% increase in mortgage payments and a 24% increase in rents between 2018 and 2024. This situation has raised concerns about a potential increase in foreclosures, especially among those who purchased homes when interest rates were lower and are now struggling to afford payments.

Daniel Delfino, AHFC’s director of planning and program development, acknowledges the complexity of the problem, noting that several factors are converging to create this mess in Anchorage’s housing market. Construction has      always been expensive in Alaska, but the pandemic has exacerbated the situation with rising inflation, supply chain problems, and rising land prices.

In the face of this crisis, Governor Mike Dunleavy and his administration are taking steps to address the lack of affordable housing, such as creating down payment assistance programs, financial incentives for new home construction, expanding housing programs for professionals such as teachers and health care workers, and allocating funds for senior housing.

Of particular note is the Last Frontier Housing Initiative, which seeks to create new housing units in communities such as Bethel, Nome, Kotzebue, Sitka, and Ketchikan. In addition, House Bill 273, introduced by Governor Dunleavy, seeks to reduce down payment requirements for Alaskans seeking to obtain home loans through AHFC.

Despite the challenges, dialogue and collaboration among various stakeholders should always be considered to find innovative solutions. It will take a collective community effort and new partnerships to address the housing crisis in Anchorage.

By Elias DaSilva | September 25, 2024.