2 Charts that Show the Truth about Home Affordability
There is a lot of discussion about the current state of housing affordability for both first-time and move-up buyers, and much of the narrative is tarnished with a negative slant. However, the truth is that housing affordability is better today than at almost any time in our history.
The naysayers are correct in the fact that affordability today is not as good as it has been over the last several years. But, we must remember that home prices collapsed during the housing crash, and distressed properties (foreclosures and short sales) kept home values depressed for years. When we compare affordability to the decades that proceeded the crash, a different story is revealed.
Here is a graph of the National Association of Realtors’ Housing Affordability Index. The higher the graph, the more affordable homes are.
We can see that affordability is better today than in the fifteen years prior to the boom and bust.
It reveals that, though a ‘typical’ housing payment was less expensive in 2012 (remember distressed properties), it is currently less expensive than it was in 2000 and is still projected to be lower next year than it was in 2000.
Mark Fleming, Chief Economist at First American, explained it best:
“While borrowing power for the potential home buyer has fallen relative to the low point of 2012, it remains high today and will remain high next year, relative to the long run average. If you don’t want to rent anymore and are considering becoming a homeowner, even if mortgage rates rise next year, your borrowing power will remain strong by historic standards.”
Author:Lisa Handley Phone: 612-390-6520 Dated: November 29th 2017 Views: 140 About Lisa: TEAM LEADER & Sales Manager for TC Specialists is LISA HANDLEY - 612-390-6520. Lisa is a native of M...
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TEAM LEADER & Sales Manager for TC Specialists is LISA HANDLEY - 612-390-6520. Lisa is a native of McIntosh, Minnesota, moved "south" with her family, to where it is "warmer" and, as an empty-nester, pursued her long-time goal of becoming a top real estate agent. She has been married to husband Chris for 23 years and has a son, Tyler, who is also an Realtor for the Twin Cities Specialists Team (612-516-7760) and a daughter, Erica, who is attending the University of Minnesota and plays for the Gophers volleyball team. Lisa is goal and service oriented and works hard to achieve what she sets her sites on. Lisa has proven her commitment to success through her years of working in Higher Education where she became a Head College Volleyball Coach and Sports Information Director, all by the age of 29. She then earned her Master’s Degree, became an Instructor, Athletic Director and finally Dean of Student Services. Lisa's cherish's her positions on her journey to founding Handley Enterprises, Inc., and the Twin Cities Specialists team. Her coaching, team building, marketing and business experience was the perfect combination leading up to her successful real estate career.
Throughout her journey there was one constant: Lisa is a person who cares about people and will do what it takes to see others achieve their goals. Ultimately, this is what prompted her to start her own team. The Twin Cities Specialists consists of service-oriented agents and other industry professionals that will do and be the best for our clients through the entire buying and selling process. TC Specialists will be there for our clients from the very early stages of planning, home market analysis's, pre-approvals, showings, listing, staging, photography, showings, negotiations, and all the way through the closings. Our mission is to treat our clients the way we would want our own families to be treated, with kindness, respect and service that goes above and beyond.