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Housing Is Still Affordable in the United States!

Housing Is Still Affordable in the United States! | Simplifying The Market

Lately, there have been many headlines circulating about whether or not there is an “affordability issue forming in the housing market.”

If you are considering selling your current house and moving up to the home of your dreams, but are unsure whether or not to believe what you’re seeing in the news, let’s look at the results of the latest Housing Affordability Report from the National Association of Realtors (NAR).

According to NAR:

“A 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 above 100 signifies that a family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.”

  • The national index results for August came in at 141.2.
  • This is up from 138.9 in July, but down 8.3% from last August’s value of 153.9.

One big factor in determining affordability each month is the interest rate available at the time of calculation. In August 2017, the 30-year fixed rate mortgage interest rate was 4.19%. This August, the rate rose to 4.78%!

With an index reading of 141.2, housing remains affordable in the U.S.

Regionally, affordability is up in three out of four regions. The Northeast had the biggest gain at 6.2%. The South had an increase of 2.4% followed by the West with a slight increase of 0.1%. The Midwest had the only dip in affordability at 4.8%.

Despite month-over-month changes, the most affordable region remains the Midwest, with an index value of 175.7. The West remains the least affordable region at 101.2. For comparison, the index was 146.7 in the South, and 151.2 in the Northeast.

Bottom Line

If you are thinking of selling your home, let’s get together to discuss the affordability conditions in our marketplace.

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Will Home Prices Continue to Increase?

Will Home Prices Continue to Increase? | Simplifying The Market

There are many unsubstantiated theories about what is happening with home prices. From those who are worried that prices are falling (data shows this is untrue), to those who are concerned that prices are again approaching boom peaks because of “irrational exuberance” (this is also untrue as prices are not at peak levels when they are adjusted for inflation), there seems to be no shortage of opinion.

However, the increase in prices is easily explained by the theory of supply & demand. Whenever there is a limited supply of an item that is in high demand, prices increase. It is that simple. In real estate, it takes a six-month supply of existing salable inventory to maintain pricing stability. In most housing markets, anything less than six months will cause home values to appreciate and anything greater than seven months will cause prices to depreciate (see chart below).

Will Home Prices Continue to Increase? | Simplifying The Market

According to the Existing Home Sales Report from the National Association of Realtors (NAR), the monthly inventory of homes for sale has been below six months for the last five years (see chart below).

Will Home Prices Continue to Increase? | Simplifying The Market

Bottom Line

If buyer demand continues to outpace the current supply of existing homes for sale, prices will continue to appreciate. Nothing nefarious is taking place. It is simply the theory of supply & demand working as it should.

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20 Tips for Preparing Your House for Sale This Fall [INFOGRAPHIC]

20 Tips for Preparing Your House for Sale This Fall [INFOGRAPHIC] | Simplifying The Market

20 Tips for Preparing Your House for Sale This Fall [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • When listing your house for sale, your top goal will be to get the home sold for the best price possible!
  • There are many small projects that you can do to ensure this happens!
  • Your real estate agent will have a list of specific suggestions for getting your house ready for market and is a great resource for finding local contractors who can help!
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JULIE CVERCKO
386-668-8668
840 Deltona Blvd. St. F-1
Deltona, Florida 32725
Julie@primerealestateinc.com

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Julie and Jake were wonderful. They both went above and beyond helping me in the entire process of finding and buying my new home! Leslie Doherty
This sales associate team has the best experience and guidance to provide any home buyer. I could seriously go on and on. They are authentic. They have integrity. They approach each case covering all the bases. It has been two weeks since I moved into my home and I am still a bit reactionary yet, they have reached out to check on me. I am so grateful. They have real knowledge and experience in so many ways, other parts of the country, the market, dealing with other agents, experience with lenders; they gave me confidence. I feel they treated me with respect and whether I was a multi millionaire or the truth, a person with a tenuous credit score, they did their best for me and with me. Every home we looked at, they provided positive options to flaws or problems. They utilized every communication modality possible to assist me and get thru the whole process. They are down to earth authentic people that understood my fears and gave me time for explanations every time. I learned so much from them. Plus, they dont stop at the end of the sale! They continue to provide excellent service with contacts and advice. I am seriously very grateful. Mary Robison
Julie and Jake best team ever. They are easy-going to work with. Their genuine interest in our needs and desires made buying our property a fantastic experience. They were patient, extremely attentive,and offered sound advice during the entire process. We couldn't be happier with our new home or with the service we received from them. Isabel Candelas Sanabria
Thanks to you and Jake for a great job done. When I first called you I received a wonderful service from you. Thank to your son for being there at the closing. Anthony Mangogna
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