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

Dated: July 5 2018

Views: 216


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

Rental Listing Available In North Houston

RENTAL LISTING AVAILABLE in North Houston!! Fantastic Location!!Fantastic opportunity in the wonderful NEW community of Retreat at Champions Landing. This gorgeous Newer ENERGY EFFICIENT one

Read More

Wishing You A Happy New Year

Russell and Melissa BankiBest Priced Properties TeamHelping our clients achieve all of their real estate goals!www.bestpricedproperties.comThinking of selling your home and curious about your home's

Read More

Merry Christmas

Russell and Melissa BankiBest Priced Properties TeamHelping our clients achieve all of their real estate goals!www.bestpricedproperties

Read More

Our Inner Loop Listing Sold For Fifty Thousand Above List Price

LISTED at $530K and SOLD for $580K!!We sold our Inner Loop listing for $50K above list price! Our selling clients had previously tried to sell their home for months through another agent with

Read More