You might be seeing in the press or hearing from others that owning a home today is less affordable than it has been in the past. Sure, home prices have increased over the last five years and current inventory is tight.
However, that narrative is completely wrong, when you look at the data. Now is the most affordable buying a home has been in the last 30 years.
I’m linking to an article from Caety James at Keeping Current Matters that outlines some of the reasons. You can find the article in its entirety here…
Low Mortgage Rates a Key Driver
James writes: “Homes, in most cases, are purchased with a mortgage. The current mortgage rate is a major component of the affordability equation. Mortgage rates have fallen by over a full percentage point since December 2018. Another major piece of the affordability equation is a buyer’s income. The median family income has risen by approximately 3% over the last year.”
Just take a look a the National Association of Realtors “Housing Affordability Index” – it shows that home affordability is better today than nearly any point over the last 30 years!
Potential buyers really should take the time to find out why now is the time to make that purchase.
Payment as Percentage of Income
The report on the index also calculates the mortgage payment on a median priced home as a percentage of the median national income. Historically, that percentage is just above 21%. Here are the percentages since June of 2018:
Again, we can see that affordability is much better today than the historical average and has been getting better over the last year and a half.
Whether you’re thinking about buying your first home or contemplating a vacation home or investment property, don’t let the false narrative about affordability prevent you from moving forward.
From an affordability standpoint, this is truly one of the best times to buy in the last 30 years. Please do reach out to me to find out more and how I can help!