Everybody is ready to purchase a home at different times in their lives, and despite the health crisis, today is no exception. Recognizing how affordability functions and the main market factors that impact it could help those who are prepared to buy a house narrow down their optimal window of time to create a buy.
There are three Chief factors that go into determining how affordable homes are for buyers:
- Mortgage Rates
- Mortgage Payments as a Percentage of Income
- Home Prices
The National Association of Realtors (NAR), generates a Housing Affordability Indicator , which requires these three factors into account and decides an overall affordability score for home.
“…steps whether or not a normal household earns enough income to be eligible for a mortgage loan on a typical home in the regional and national levels based on the latest cost and income data.”
Even though there are 3 factors that drive the overall equation, the one that’s playing with the largest part in today’s homebuying affordability is low mortgage prices . According to this primary factor, we can see that it is cheaper to purchase a house now than at any time in the last seven years.
If you’re thinking about buying your first home or moving up to the one you’ve always hoped for, it is important to realize how affordability plays to the overall cost of your property. With that in mind, buying while mortgage rates are as low as they are now may save quite a bit of cash over the life span of your home loan.
If you feel ready to purchase a home, purchasing this season may help save you significantly over time based on historical affordability trends. Reach out to a regional real estate professional now to determine if now is the ideal time to make your move.
Call today to speak with on of knowledgeable agents.