2 Trends Helping Keep Housing Affordable | Relocating to Charlotte

2 Trends Helping Keep Housing Affordable | Relocating to Charlotte

Two positive trends have started to emerge that impact the 2019 Spring Housing Market. Mortgage interest rates for a 30-year fixed rate loan have dropped to new lows, right as reports show that wages have increased at their highest rate in decades!

These two factors have helped keep housing affordable despite low supply of houses for sale driving up prices. First American’s Chief Economist, Mark Fleming, explains the impact,

“Ongoing supply shortages remain the main driver of the performance gap as the housing market continues to face an inventory impasse – you can’t buy what’s not for sale.

However, an unexpected affordability surge, driven primarily by lower-than-anticipated mortgage rates, rising wages and favorable demographics, has boosted housing demand.”

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The Ultimate Truth about Housing Affordability | Charlotte Real State

There have been many headlines decrying an “affordability crisis” in the residential real estate market. While it is true that buying a home is less affordable than it had been over the last ten years, we need to understand why and what that means.

On a monthly basis, the National Association of Realtors (NAR), produces a Housing Affordability Index. According to NAR, the index…

Measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.

Their methodology states:

To interpret the indices, 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 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.

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A Lack of Inventory Continues to Impact the Housing Market

The housing crisis is finally in the rear-view mirror as the real estate market moves down the road to a complete recovery. Home values are up and distressed sales (foreclosures and short sales) have fallen to their lowest point in years. The market will continue to strengthen in 2019.

However, there is one thing that may cause the industry to tap the brakes: a lack of housing inventory! Buyer demand naturally increases during the summer months, but supply has not kept up.

Here are the thoughts of a few industry experts on the subject:

Lawrence Yun, Chief Economist at National Association of Realtors

“Further increases in inventory are highly desirable to keep home prices in check, the sustained steady gains in home sales can occur when home price appreciation grows at roughly the same pace as wage growth.”

Jessica Lautz, Vice President of NAR

“There’s a supply-demand mismatch… More inventory is needed at the lower end and a price reduction may be needed at the upper end.”

Danielle Hale, Chief Economist of Realtor.com

“Heading into spring, U.S. prices are expected to continue to rise and inventory is expected to continue to increase, but at a slower pace than we’ve seen the last few months as fewer sellers want to contend with this year’s more challenging conditions… A buyer’s experience will vary notably depending on the market and price point they’re targeting.”

Bottom Line

If you are thinking of selling, now may be the time! Demand for your house will be strong at a time when there is very little competition. That could lead to a quick sale for a really good price!

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How Quickly Can You Save Your Down Payment?

Saving for a down payment is often the biggest hurdle for a first-time homebuyer. Depending on where you live, median income, median rents, and home prices all vary. So, we set out to find out how long it would take to save for a down payment in each state.

Using data from HUD, Census and Apartment List, we determined how long it would take, nationwide, for a first-time buyer to save enough money for a down payment on their dream home. There is a long-standing ‘rule’ that a household should not pay more than 28% of their income on their monthly housing expense.

By determining the percentage of income spent renting in each state, and the amount needed for a 10% down payment, we were able to establish how long (in years) it would take for an average resident to save enough money to buy a home of their own.

According to the data, residents in Kansas can save for a down payment the quickest, doing so in just over 1 year (1.12). Below is a map that was created using the data for each state:

What if you only needed to save 3%?

What if you were able to take advantage of one of Freddie Mac’s or Fannie Mae’s 3%-down programs? Suddenly, saving for a down payment no longer takes 2 to 5 years, but becomes possible in less than a year in most states, as shown on the map below.

Whether you have just begun to save for a down payment or have been saving for years, you may be closer to your dream home than you think! Let’s get together to help you evaluate your ability to buy today.

For more info visit here: Vantage Realty Pros

Do 46 Million Millennials Know They Are Mortgage Ready?

Do 46 Million Millennials Know They Are Mortgage Ready?

Many have written about the millennial generation and whether or not they, as a whole, believe in homeownership as part of attaining the American Dream.

Millennials have taken longer to obtain traditional milestones than the generations before them, such as getting married, having kids, and buying a home. However, that does not mean that they do not still aspire to achieve those things.

History shows that people tend to buy their first home around age 30. Nearly 5 million millennials will turn 30 in the next two years. This will continue to fuel demand for housing.

This is also one of the many reasons why the millennial homeownership rate has continued to grow over the past few years. 48.4% of Americans between the ages of 30-34 now own a home.

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