The Monica Foster Team
Menu
  • Home
  • Buyers
    • Close
    • Properties
      • Search For Homes
      • Request Home Search
      • 24/7 Virtual Open Houses
      • Our Listings
      • New Listings
      • Home Walkthroughs
    • Buyers
      • Buyer Representation
      • Luxury Home Buying
      • New Home Construction
      • Virtual Buying
      • Market Snapshot
      • American Dream TV
    •  
      • Cities / Neighborhoods
      • Schools
      • Relocation
      • Short Sales & Foreclosures
      • Trusted Lenders
    • Buyer Resources
      • Buyer Videos
      • Millennial Home Owner Guide
      • Community & School Reports
      • Area School Districts Facts
      • When Choosing a Home
      • Buyer Negotiation Process
      • Housing Programs
    •  
      • Buying a Home Guide
      • Property Disclosures
      • Ready to Buy
      • Ready to Move
      • Final Walkthrough Checklist
      • Homestead Exemption
      • Real Estate Flow Chart
    •  
      • Title Policy Rates
      • Contract to Close Process
      • Who Pays What?
      • Owning a Home
      • Mortgages
      • Mortgage Rates
      • Property Tax Records
    • Close
  • Sellers
    • Close
    • Sellers
      • Selling Your Home
      • Virtual Selling
      • Luxury Home Marketing
      • Market Snapshot
      • American Dream TV
    •  
      • Value My Property
      • Easy Home Offer
      • Home Offer Consultant
      • Short Sale
      • Expired Listing
      • Relocation Company
    •  
      • Selecting Your Agent
      • Professional Photos
      • 3-D Tours
      • Home Staging
      • Virtual Staging
    • Seller Resources
      • Seller Videos
      • Ready To Sell
      • Priced To Sell
    •  
      • Selling Your Home Guide
      • Ready To Move
      • Contract to Closing
    •  
      • Who Pays What?
      • Remodeling
      • Real Estate Flow Chart
    • Close
  • Raving Fans
  • About
  • Contact
    • Close
    • Social
      • Facebook
      • Twitter
      • Pinterest
    •  
      • Social Wall
      • Blog
      • YouTube
    • Help
      • Ask Us
      • Refer Us
      • Join Us
    • Close

Realty Blog By Monica

Yes, You Can Still Afford a Home

0
March 12, 2020 - General Information

The residential real estate market has come roaring out of the gates in 2020. Compared to this time last year, the number of buyers looking for a home is up 20%, and the number of home sales is up almost 10%. The increase in purchasing activity has caused home price appreciation to begin reaccelerating. Many analysts have boosted their projections for price appreciation this year.

Whenever home prices begin to increase, there’s an immediate concern about how that will impact the ability Americans have to purchase a home. That thinking is understandable. We must, however, realize that price is not the only element to the affordability equation. Mark Fleming, Chief Economist at First American, recently explained:

“When demand increases for a scarce (limited or low supply) good, prices will rise faster. The difference between houses and other goods is that we buy them with a mortgage. So, it’s not the actual price that matters, but the price relative to purchasing power.”

While home prices have risen recently, mortgage interest rates have fallen rather dramatically. At the beginning of last year, the 30-year fixed-rate mortgage stood at 4.46%. Today, that number stands over a full percentage point lower.

How does a lower mortgage rate impact your monthly mortgage payment?

Michael Hyman, a research data specialist for the National Association of Realtors (NAR), explained in a recent report that, even though home values have increased over the last year, the monthly cost of owning a home has decreased:

“With lower mortgage rates compared to one year ago, the payment as a percentage of income fell to 15.5%…from 17.1% a year ago.”

When purchasing a home, the price is not as important as its cost. Today, the monthly expense (cost) of purchasing the same house you could have purchased last year would be less. Or, you could purchase a more expensive home for the same monthly expense.

Fleming, looking at all aspects of the affordability equation (prices, wages, and mortgage rates), calculated the actual numbers in a recent blog post:

“Low mortgage rates and income growth triggered a 13.5% increase in house-buying power compared with a year ago.”

Since wages have increased and mortgage rates have dropped to historically low levels, this is a great time to buy your first home or move up to the home of your dreams. As Tendayi Kapfidze, Chief Economist at LendingTree, recently advised:

“If you are in a point in your life where you’re considering buying a home today, it’s a better time to buy than 10 years ago. If you can get a mortgage, you’re getting much lower interest rates, and it enables you to afford more.”

Bottom Line

Whether you’ve considered becoming a homeowner for the first time or have decided to sell your home and buy one that better suits your current lifestyle, now is a great time to get together and discuss your options.

Source: simplifyingthemarket.com

Monica Foster March 12, 2020
Tags:   First Time Home BuyersFor BuyersInterest RatesMove-Up BuyersPricing

RELATED POSTS

NO COMMENTS

Leave a comment Cancel reply

Your email is never published or shared.

SubscribeSubscribe to Blog

Recent Posts

  • Home Is Where the Heart Is [INFOGRAPHIC]
  • Why This Is a Great Year to Sell Your Vacation Home
  • 93% of Americans Believe a Home Is a Better Investment Than Stocks
  • Some Buyers Prefer Smaller Homes
  • 4 Major Reasons Households in Forbearance Won’t Lose Their Homes to Foreclosure

Categories

  • Credit
  • Curb Appeal
  • Decor
  • Financing
  • General Information
  • Green Living
  • Home Buying
  • Home Inspections
  • Home Ownership
  • Home Selling
  • Home Staging
  • Home Walkthrough
  • Insurance
  • Lifestyle
  • Local Area
  • Market Conditions
  • Marketing
  • Mortgage
  • Moving
  • New Construction
  • New Listings
  • News
  • Parks and Recreation
  • Property Taxes
  • Quality of Life
  • Remodeling/Home Improvement
  • Rent vs. Buy
  • Schools
  • Sold Listings

Archives

Our Social Networks

Our Social Networks

Brokered by eXpRealty

Certified Residential Specialist
Accredited Buyer Representative
Certified New Home Specialist
Accredited Staging Professsional
Certified Luxury Home Marketing Specialist
Seller Representative Specialist

Monica M. Foster

Monica M. Foster
The Monica Foster Team

Houston – Clear Lake – Seabrook
League City – Friendswood
Pearland – Galveston

Main: 346.202.7307

Contact Us

© 2021 Realty By Monica, LLC  • 

Terms of Use  •  Privacy Policy
Texas Real Estate Commission Information About Brokerage Services
Texas Real Estate Commission Consumer Notice