The Truth About Housing Affordability

    The Truth About Housing Affordability | Keeping Current Matters

    From a purely economic perspective, this is one of the best times in American history to buy a home. Black Night Financial Services discusses this in their most recent Monthly Mortgage Monitor.

    Here are two of the report’s revelations:

    1. The average U.S. home value increased by $13,500 from last year, but low interest rates have kept the monthly principal & interest payment needed to purchase a median-priced home almost equal to one year ago.
    2. Home affordability still remains favorable compared to long-term historic norms.

    The report explains:

    “Even though the value of the average home in the U.S. increased by about $13,500 over the last year, thanks to declining interest rates it actually costs almost exactly the same in principal and interest each month to purchase as it did this time last year.

    Even taking into account the fact that affordability can vary – sometimes significantly – across the country based upon the different rates of home price appreciation we’re seeing, that’s a pretty incredible balancing act between interest rates and home prices at the national level…

    Right now, it takes 20 percent of the median monthly income to cover monthly payments on the median-priced home, which is well below historical norms.”

    However, the report warns that affordability will be dramatically impacted by an increase in mortgage rates.

    “A half-point increase in interest rates would be equivalent to a $17,000 jump in the average home price, and bring that ratio to 21.5 percent. This increase is still below historical norms, but puts more pressure on homebuyers.”

    Bottom Line

    If you are ready and willing to purchase a home of your own, find out if you’re able to. Now is a great time to jump in.

    Source:  Keeping Current Matters

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    Steve Baker

    Steve comes to the world of real estate with nearly 30 years of Marketing and Graphic Design experience. These two very important skills make him ideal for this profession. In 2017 he achieved his highest accolade to date becoming a global, award-winning real estate graphic design/marketing recipient. Mr. Baker is not only a REALTOR but the Director of Marketing for Rinehart Realty. His education and work experience also include a Bachelor degree in Education and degrees in Radiologic Technology and Medical Ultrasonography. He was a pioneer in the field of Radiology PACS development and Radiology Voice Recognition adoption and implementation in southwest Virginia. His previous positions as Director of Radiology and PACS Administrator lead to enormous development in resources and project management necessary to succeed in the field of real estate. Steve is a writer and developer for a variety of blogs and real estate publications. He recently completed his first book of quotations and is currently working on a Real Estate Marketing book. He is a strong supporter of the United Way, having won a past Campaign Coordinator of the Year award. He is also a strong advocate for breast cancer research and education. Mr. Baker has a history of work experience developed on the foundation of a strong work ethic, the pursuit of excellence, quality, honesty and integrity.

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