One question that you might get, or a comment that you might get about the market is everybody's talking about home prices being very high.
They might say, "You know, I don't think I'm going to enter the market because the prices are so high. Or I don't think this is sustainable, that these prices are so high."
And home prices have gone up over the last couple of years. But another measurement to take a look at when we're analyzing the market is something called affordability. It's actually something that's tracked by the National Association of REALTORS.
Affordability is key because it takes into account several key factors.
1. Your income — the median income of families across the country.
2. It takes into account the median interest rate being paid by mortgage borrowers across the country
3. And median pricing
When you combine those three factors, you fid affordability is better than it's been in decades.
Now, how could that be?
Well, pricing is only one of those three legs. What drives affordability a lot more is interest rates. And interest rates are sitting at 60-year lows. In fact, when you study it, you can see that since interest are down to about 3%, it's made affordability better than it's been in decades.
There's a study that's done every month from the National Association of REALTORS, which studies affordability. Right now, we're sitting at a 151 mark and affordability has gotten better over the last couple of months as prices have moderated.
But what does 151 mean anyway? The median family in the country has 151% of the income needed to qualify for the median mortgage based on the median interest rates in the country.
They actually have 50% more than they would need to qualify! A 100 would mean they'd have exactly enough to qualify.
Right now it's super affordable time for most people in the country to purchase a home relative to other times over the past few decades.
So yes, price is a factor, but there's other factors to consider when looking at the overall market. So check that out, look at affordability and see how that impacts your clients, yourself, your market, and see if that would have an impact on the decision-making of your clients.
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