According to recent headlines, purchasing homes have become less affordable nowadays compared to the last decade. However, considering the previous market of foreclosed and short sale properties selling at 10-15% discounted asking prices, which resulted other non-distressed properties in the same areas to reduce prices, and the maintained lowered mortgage rates to assist the economy; it is obvious that homeownership is more expensive now than the last ten years.
As the economy strengthens over time, the prices and mortgage rates have increased creating significant effect towards home values and prices.
Although, in context related to affordability, the National Association of Realtors has reported their 138.8 Affordability Index most recently, which translates to the measure of a typical family to have sufficient income to qualify for a mortgage loan for an average home at a specific level based on recent price and income data. Considering the index reported from the past years which never peaked not greater than 133, this means that homes are rather more affordable to an average family compared any time from the past 18 years from 1990 and 2007.
Clearly, despite the prices continuously hiking together with the increasing mortgage rates, home ownership is not impossible in most market. If you are interested in professional advice on the present market in real estate, give me a call at (704) 237-0313 or (704) 617-0847.
Source: Keeping Current Matters