Homes Are More Affordable Today, Not Less Affordable

Homes Are More Affordable Today, Not Less Affordable

Homes Are More Affordable Today, Not Less Affordable

Homes Are More Affordable Today, Not Less Affordable | MyKCM

There’s a current narrative that owning a home today is less affordable than it has been in the past. The reason some are making this claim is because house prices have substantially increased over the last several years.

It’s not, however, just the price of a home that matters.

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.

The National Association of Realtors (NAR) releases a monthly Housing Affordability Index. The latest index shows that home affordability is better today than at almost any point over the last 30 years. The index determines how affordable homes are based on the following:

“A Home Affordability Index 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 of 120 signifies that a family earning the median income has 20 percent more than the level of income needed pay the mortgage on a median-priced home, assuming a 20 percent down payment so that the monthly payment and interest will not exceed 25 percent of this level of income (qualifying income).”

The higher the index, therefore, the more affordable homes are. Here is a graph showing the index since 1990:Homes Are More Affordable Today, Not Less Affordable | MyKCMObviously, affordability was better during the housing crash when distressed properties – foreclosures and short sales – sold at major discounts (2009-2015). Outside of that period, however, homes are more affordable today than any other year since 1990, except for 2016.

The report on the index also includes a section that 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:Homes Are More Affordable Today, Not Less Affordable | MyKCMAgain, 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.

Bottom Line

Whether you’re thinking about buying your first home or moving up to the home of your dreams, don’t let the false narrative about affordability prevent you from moving forward. From an affordability standpoint, this is one of the best times to buy in the last 30 years.

Find The Perfect Home Here

Buyer Guide (Its Free)

South Jordan City Leisure Guide

[flipbook pdf="https://utahrealtyluxury.com/wp-content/uploads/2018/01/South-Jordan-Leisure-Guide-Jan1_18.pdf"] Here are the events that  South Jordan City is planning on for Januarary thru April . South Jordan Leisure Guide Jan1_18

It pays to hire professional Realtors

Do it yourself companies Utah Division of Real Estate HOMIE, INC., real estate brokerage, Draper, Utah. In a stipulated order dated October 18, 2017, Homie, Inc. admitted to offering a variety of services to individuals seeking to sell or buy real estate located in...

Grant Money for Down Payment

Grant Money for Down Payment

Grant Money you don't have to pay back? WOW! We will have several 5K grants that may be applied to the down payment. Grant money will be available in mid-January, so start lining up your clients. There will be a limited number and will be awarded...

Salt Lake County Top 10 Highest Price Cities

Salt Lake County Top 10 Highest Price Cities

  Price of Salt Lake Homes Hits New High The price of a single-family home has increased to its highest point ever before, according to the Salt Lake Board of Realtors®. In the July-August-September quarter, the median price of a Salt Lake...

Salt Lake County Top 10 Highest Price Cities

Welcome Tanna Barker New Associate with Utah Realty

Press Release,   Utah Realty is incredibly pleased to announce that Tanna Barker, a new real estate agent has joined our team. We are excited to work with her and know you will be too. Tanna  has over 20 years of experience working with...

[mlcalc default=”mortgage_only”]

2020 Luxury Market Forecast

2020 Luxury Market Forecast

2020 Luxury Market Forecast

2020 Luxury Market Forecast | MyKCM

By the end of last year, many homeowners found themselves with more equity than they realized, and at the same time their wages were increasing. When those two factors unite, it can spark homeowners to think about making a move to a larger or more expensive home in the luxury space. That said, now is a perfect opportunity to take a look at the forecast for the 2020 luxury market.

Three Things to Think About in the 2020 Luxury Housing Market

1. Prices

The U.S. economy is strong today, with buying opportunities throughout the luxury end of the market. Thomas Veraguth, Strategist at UBS Global Wealth Management, says in Barrons.com,

“There’s a good link between luxury real estate prices and [economic] growth.”

Available inventory is a key element that can impact home prices. At the upper range, the inventory is greater in comparison to the entry-level market, making moving up to a luxury home a growing reality for many buyers right now.

2. Activity in the Market

With more buying opportunities at the higher end, we should start to see an increase in activity. The same article states,

“Affluent homebuyers will start to come out of the woodwork as they find rising luxury rents less appealing and sellers get even more negotiable on price.”

Buyers looking in the luxury market are taking the opportunity to negotiate on price in a segment where there are more choices, too. According to the Luxury Market Report, homes sold for an average of 96.94% of the list price in December.

Buyers are also getting more for their money with greater purchasing power due to the current low interest rates.

3. Buyers Are Coming Back

Keep in mind, buyers are often sellers too, especially those looking to move up. Homeowners with an entry-level home can take advantage of the inventory shortage at the lower end of the market, thus driving higher sales prices for their current homes. Combined with growing equity in the homes they’re listing, it’s a great time for those who are ready to make a luxury move.

The extra equity and greater purchasing power are bringing many buyers back to the market. The same article mentioned that,

“We’ve already seen buyers who’ve been on the sidelines for two years tread back into the market.”

Bottom Line

If you’re considering entering the luxury market, 2020 is shaping up to be a great year for those who are ready to make that move. Let’s get together to set your real estate plan for the year.

South Jordan City Leisure Guide

[flipbook pdf="https://utahrealtyluxury.com/wp-content/uploads/2018/01/South-Jordan-Leisure-Guide-Jan1_18.pdf"] Here are the events that  South Jordan City is planning on for Januarary thru April . South Jordan Leisure Guide Jan1_18

It pays to hire professional Realtors

Do it yourself companies Utah Division of Real Estate HOMIE, INC., real estate brokerage, Draper, Utah. In a stipulated order dated October 18, 2017, Homie, Inc. admitted to offering a variety of services to individuals seeking to sell or buy real estate located in...

Grant Money for Down Payment

Grant Money for Down Payment

Grant Money you don't have to pay back? WOW! We will have several 5K grants that may be applied to the down payment. Grant money will be available in mid-January, so start lining up your clients. There will be a limited number and will be awarded...

Salt Lake County Top 10 Highest Price Cities

Salt Lake County Top 10 Highest Price Cities

  Price of Salt Lake Homes Hits New High The price of a single-family home has increased to its highest point ever before, according to the Salt Lake Board of Realtors®. In the July-August-September quarter, the median price of a Salt Lake...

Salt Lake County Top 10 Highest Price Cities

Welcome Tanna Barker New Associate with Utah Realty

Press Release,   Utah Realty is incredibly pleased to announce that Tanna Barker, a new real estate agent has joined our team. We are excited to work with her and know you will be too. Tanna  has over 20 years of experience working with...

Marty Gale, Broker

MCNE, CNE, CRS

Luxury Home Specialist

801.205.3500

Buying a Home Early in Life Can Increase Future Wealth

Buying a Home Early in Life Can Increase Future Wealth

Buying a Home Early Can Significantly Increase Future Wealth

Buying a Home Early Can Significantly Increase Future Wealth | MyKCM

According to an Urban Institute study, homeowners who purchase a house before age 35 are better prepared for retirement at age 60.

The good news is, our younger generations are strong believers in homeownership.

According to a Freddie Mac survey,

“The dream of homeownership is alive and well within “Generation Z,” the demographic cohort following Millennials.

Our survey…finds that Gen Z views homeownership as an important goal. They estimate that they will attain this goal by the time they turn 30 years old, three years younger than the current median homebuying age (33).”

Buying a Home Early Can Significantly Increase Future Wealth | MyKCMIf these aspiring homeowners purchase at an early age, the Urban Institute study shows the impact it can have.

Based on this data, those who purchased their first homes when they were younger than 25 had an average of $10,000 left on their mortgage at age 60. The 50% of buyers who purchased in their mid-20s and early-30s had close to $50,000 left, but traditionally purchased more expensive homes.Buying a Home Early Can Significantly Increase Future Wealth | MyKCMAlthough the vast majority of Gen Zers want to own a home and are somewhat confident in their future, “In terms of financial awareness, 65% of Gen Z respondents report that they are not confident in their knowledge of the mortgage process.”

Bottom Line

As the numbers show, you’re not alone. If you want to buy this year but you’re not sure where to start the process, let’s get together to help you understand the best steps to take from here.

South Jordan City Leisure Guide

[flipbook pdf="https://utahrealtyluxury.com/wp-content/uploads/2018/01/South-Jordan-Leisure-Guide-Jan1_18.pdf"] Here are the events that  South Jordan City is planning on for Januarary thru April . South Jordan Leisure Guide Jan1_18

It pays to hire professional Realtors

Do it yourself companies Utah Division of Real Estate HOMIE, INC., real estate brokerage, Draper, Utah. In a stipulated order dated October 18, 2017, Homie, Inc. admitted to offering a variety of services to individuals seeking to sell or buy real estate located in...

Grant Money for Down Payment

Grant Money for Down Payment

Grant Money you don't have to pay back? WOW! We will have several 5K grants that may be applied to the down payment. Grant money will be available in mid-January, so start lining up your clients. There will be a limited number and will be awarded...

Salt Lake County Top 10 Highest Price Cities

Salt Lake County Top 10 Highest Price Cities

  Price of Salt Lake Homes Hits New High The price of a single-family home has increased to its highest point ever before, according to the Salt Lake Board of Realtors®. In the July-August-September quarter, the median price of a Salt Lake...

Salt Lake County Top 10 Highest Price Cities

Welcome Tanna Barker New Associate with Utah Realty

Press Release,   Utah Realty is incredibly pleased to announce that Tanna Barker, a new real estate agent has joined our team. We are excited to work with her and know you will be too. Tanna  has over 20 years of experience working with...

South Jordan City Leisure Guide

[flipbook pdf="https://utahrealtyluxury.com/wp-content/uploads/2018/01/South-Jordan-Leisure-Guide-Jan1_18.pdf"] Here are the events that  South Jordan City is planning on for Januarary thru April . South Jordan Leisure Guide Jan1_18

It pays to hire professional Realtors

Do it yourself companies Utah Division of Real Estate HOMIE, INC., real estate brokerage, Draper, Utah. In a stipulated order dated October 18, 2017, Homie, Inc. admitted to offering a variety of services to individuals seeking to sell or buy real estate located in...

Grant Money for Down Payment

Grant Money for Down Payment

Grant Money you don't have to pay back? WOW! We will have several 5K grants that may be applied to the down payment. Grant money will be available in mid-January, so start lining up your clients. There will be a limited number and will be awarded...

Salt Lake County Top 10 Highest Price Cities

Salt Lake County Top 10 Highest Price Cities

  Price of Salt Lake Homes Hits New High The price of a single-family home has increased to its highest point ever before, according to the Salt Lake Board of Realtors®. In the July-August-September quarter, the median price of a Salt Lake...

Salt Lake County Top 10 Highest Price Cities

Welcome Tanna Barker New Associate with Utah Realty

Press Release,   Utah Realty is incredibly pleased to announce that Tanna Barker, a new real estate agent has joined our team. We are excited to work with her and know you will be too. Tanna  has over 20 years of experience working with...

[mlcalc default=”mortgage_only”]

National Cut Your Energy Costs Day

National Cut Your Energy Costs Day

National Cut Your Energy Costs Day | January 10  2020

National Cut Your Energy Costs Day [INFOGRAPHIC] | MyKCM

Some Highlights:

  • On January 10th of each year, “National Cut Your Energy Costs Day” encourages consumers to reduce their overall energy costs by improving home efficiency.
  • According to Freddie Mac, a typical U.S. family spends $2,200 per year on energy bills. By making energy efficient upgrades, you could reduce your energy bills by up to 30%.
  • To assess the energy efficiency of your home and see how it measures up, take a moment to check out Home Energy Yardstick to calculate your estimated opportunity. Don’t forget to have your energy bills nearby!

South Jordan City Leisure Guide

[flipbook pdf="https://utahrealtyluxury.com/wp-content/uploads/2018/01/South-Jordan-Leisure-Guide-Jan1_18.pdf"] Here are the events that  South Jordan City is planning on for Januarary thru April . South Jordan Leisure Guide Jan1_18

It pays to hire professional Realtors

Do it yourself companies Utah Division of Real Estate HOMIE, INC., real estate brokerage, Draper, Utah. In a stipulated order dated October 18, 2017, Homie, Inc. admitted to offering a variety of services to individuals seeking to sell or buy real estate located in...

Grant Money for Down Payment

Grant Money for Down Payment

Grant Money you don't have to pay back? WOW! We will have several 5K grants that may be applied to the down payment. Grant money will be available in mid-January, so start lining up your clients. There will be a limited number and will be awarded...

Salt Lake County Top 10 Highest Price Cities

Salt Lake County Top 10 Highest Price Cities

  Price of Salt Lake Homes Hits New High The price of a single-family home has increased to its highest point ever before, according to the Salt Lake Board of Realtors®. In the July-August-September quarter, the median price of a Salt Lake...

Salt Lake County Top 10 Highest Price Cities

Welcome Tanna Barker New Associate with Utah Realty

Press Release,   Utah Realty is incredibly pleased to announce that Tanna Barker, a new real estate agent has joined our team. We are excited to work with her and know you will be too. Tanna  has over 20 years of experience working with...

Free Buying Guide

Free Seller Guide

There’s a Long Line of Buyers Waiting for Your House

There’s a Long Line of Buyers Waiting for Your House

There’s a Long Line of Buyers Waiting for Your House

There’s a Long Line of Buyers Waiting for Your House | MyKCM

If you’re following what’s happening in the housing market right now, you know that many people believe the winter months aren’t a good time to sell a home. As realtor.com Senior Economist George Ratiu recently noted,

“Sellers tend to be more reluctant to list during the colder time of year when the market typically makes a seasonal slowdown.”

However, a recent report by ShowingTime reveals how this year is different. Buyer activity is way up compared to the same time last year. The report explains,

“The nation’s 12.6% growth in home showings compared to 2018 was the most significant jump in buyer traffic during the current four-month streak of year-over-year increases. The West Region saw the greatest growth in activity, with a 23.1% jump – the region’s greatest in the history of the Showing Index.”

The increase has spread across all four regions of the country, as the graph below shows:There’s a Long Line of Buyers Waiting for Your House | MyKCM

Bottom Line

Waiting for the “spring buyers’ market” may be a mistake this year. It seems the purchasers are already out and looking to buy.

Questions? Contact Us

Salt Lake County Top 10 Highest Price Cities

Plus Fifty Today

Do you know where is your market is going?

In 2020:

More than one-third of the U.S. population reached age 50.

17 million baby boomers (20 percent) were age 60 or older.

Generation X moved into middle age and began knocking on the door of age 58

Today demographic forces will shape the future market as generations experience the life transitions. Our own and our parents’—that accompany aging. This blog and the articles to come focuses on the maturing G.I. Generation, the Silent Generation, and the baby boomers because they comprise the 50+ market, now and for the next decade. But, interaction with Gen X and Gen Y members must be considered because they are the young adults who may be involved in the real estate decisions of their parents and elders.

Call Marty Gale

801-205-3500

 

Pin It on Pinterest