Search This Blog

Tuesday, July 7, 2020

Taking Advantage of Homebuying Affordability in Today

Taking Advantage of Homebuying Affordability in Today: Everyone is ready to buy a home at different times in their lives, and despite the health crisis, today is no exception. Understanding how affordability...,,,BY 
Real Estate Agent with Allison James Elite CA. BRE 01501699
 
Taking Advantage of Homebuying Affordability in Today’s Market | MyKCM

Everyone is ready to buy a home at different times in their lives, and despite the health crisis, today is no exception. Understanding how affordability works and the main market factors that impact it may help those who are ready to buy a home narrow down their optimal window of time to make a purchase.

There are three main factors that go into determining how affordable homes are for buyers:

  1. Mortgage Rates
  2. Mortgage Payments as a Percentage of Income
  3. Home Prices

The National Association of Realtors (NAR), produces a Housing Affordability Index, which takes these three factors into account and determines an overall affordability score for housing. According to NAR, the index:

“…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.”

Their methodology states:

“To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.”

So, the higher the index, the more affordable it is to purchase a home. Here’s a graph of the index going back to 1990:Taking Advantage of Homebuying Affordability in Today’s Market | MyKCMThe green bar represents today’s affordability. We can see that homes are more affordable now than they have been at any point since the housing crash when distressed properties (foreclosures and short sales) dominated the market. Those properties were sold at large discounts not seen before in the housing market.

Why are homes so affordable today?

Although there are three factors that drive the overall equation, the one that’s playing the largest part in today’s homebuying affordability is historically low mortgage rates. Based on this primary factor, we can see that it is more affordable to buy a home today than at any time in the last seven years.

If you’re considering purchasing your first home or moving up to the one you’ve always hoped for, it’s important to understand how affordability plays into the overall cost of your home. With that in mind, buying while mortgage rates are as low as they are now may save you quite a bit of money over the life of your home loan.

Bottom Line

If you feel ready to buy, purchasing a home this season may save you significantly over time based on historic affordability trends. Let’s connect today to determine if now is the right time for you to make your move.

 

 

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
TOPIC:
 Home Buying
LOCATION:
 
California Ventura County
TAGS:
 
preapproval
 
topproducer
 
hyperlocal
 
firsttimehomebuyers
 
realestateinvestor
 
chrisbjohnsonrealtor
 
rentalproperties
 
timetobuy
 
ajiboom
 
findyourdreamhome
 
5starrealtor
 
moveuphomebuyers
 
flipandfix
 
boomeragebuyers
 
multigenerationalbuyers

#TimeToBuy,#FirstTimeHomeBuyers,#MoveUpHomeBuyers,#5StarREALTOR,#HyperLocal,
#ChrisBJohnsonREALTOR,#TopProducer,#FlipandFix,#RealEstateInvestor,#RentalProperties,
#BoomerageBuyers,#MultiGenerationalBuyers,
#AJIBoom,#FindYourDreamHome,#PreApproval


No comments:

Post a Comment