Homes Are More Affordable In Spring TX Today Than 1985 To 2000

Dated: 07/05/2018

Views: 189


Image title

Homes More Affordable Today than 1985-2000

 

Rising home prices have many concerned that the average family will no longer be able to afford the most precious piece of the American Dream – their own home.

However, it is not just the price of a home that determines its affordability. The monthly cost of a home is determined by the price and the interest rate on the mortgage used to purchase it.

Today, mortgage interest rates stand at about 4.5%. The average annual mortgage interest rate from 1985 to 2000 was almost double that number, at 8.92%. When comparing affordability of homeownership over the decades, we must also realize that incomes have increased.

This is why most indexes use the percentage of median income required to make monthly mortgage payments on a typical home as the point of comparison.

Zillow recently released a report comparing home affordability over the decades using this formula. The report revealed that, though homes are less affordable this year than last year, they are more affordable today (17.1%) than they were between 1985-2000 (21%). Additionally, homes are more affordable now than at the peak of the housing bubble in 2006 (25.4%). Here is a chart of these findings:


Image title


What will happen when mortgage interest rates rise?

Most experts think that the mortgage interest rate will increase to about 5% by year’s end. How will that impact affordability? Zillow also covered this in their report:


Image title

Rates would need to approach 6% before homes became less affordable than they had been historically.

Bottom Line

Though homes are less affordable today than they were last year, they are still a great purchase while interest rates are below the 6% mark.


Image title


Click Here..to view all properties on the market! Best Priced Properties Team - Russell and Melissa Banki REALTORS®- Hite Properties Certified Negotiation Experts (CNE) Accredited Luxury Home Specialist (ALHS) Certified Home Selling Advisors (CHSA) Certified Home Buying Advisors (CHBA) Certified Expert Home Selling and Buying Advisors. Ask us about our Smart Home Buying and Selling Strategy. CALL OR TEXT US. cell: 713-480-0889 or 936-445-0216. As local real estate experts in The Woodlands, Spring, Shenandoah, Magnolia, Montgomery, Conroe and Greater North Houston/Houston Metro areas we can save you valuable time & money! Contact us today. It would be our pleasure to help you with all your buying, selling or investment needs. We believe our clients should feel confident and benefit from selling or purchasing real estate. Be sure and ask us about our buyer and seller promotions.

Blog author image

Melissa Banki | REALTOR® GRI CNE

REALTOR®, GRI, CNE - Hite Properties Best Priced Properties Team - The Woodlands TX Cell: 936-445-0216 Clients First! Treating the relationship with far more value than the transaction. We be....

Want to Advertise on this Site?

Latest Blog Posts

Clean Pristine On Oversized Culdesac Lot With No Back Neighbors

Clean & PristineENERGY EFFICIENT 1 story home on an HUGE OVERSIZED CUL-DE-SAC lot with NO BACK NEIGHBORS in the desirable subdivision of Hidden Creek in Conroe! One of the fastest growing cities!

Read More

2 Acre Lot Just Off Grand Parkway In Tomball 0 Hampton Wood Dr Tomball TX 77377

$139,900 RARE FIND! Fantastic LOCATION and opportunity to own and build your dream home on! Per restrictions an add apt or duplex. Min 1500 sqft. Privacy all around area. Wooded &

Read More

JUST LISTED In Cumberland Crossing Porter TX 19111 Shire Horse Blvd

Fantastic 2 STORY on CUL-DE-SAC lot in the desirable community of CUMBERLAND CROSSING ready for it's new owners! ENERGY EFFICIENT! Home features 4 bedrooms 2.5 baths, flexible bonus loft space

Read More

Happy Client Just Closed On His Cleveland TX Home

Congrats to our clients who just closed on their very first home in Cleveland, TX! So MANY new memories to be made! We don't mess around and get to work right away for our clients making

Read More