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Charts Don’t Lie About Housing Affordability

These Charts Don’t Lie About Housing Affordability! There’s a lot of discussion about the current state of housing affordability for both first-time and move-up buyers. 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 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. 2 Charts That Show the Truth about Home Affordability

Charts Don’t Lie About Housing Affordability

We can see that affordability is better today than in the fifteen years prior to the boom and bust. CoreLogic just published a report showing the National Homebuyers’ “Typical Mortgage Payment.” Here is a graph of their findings: 2 Charts That Show the Truth about Home Affordability 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.

Bottom Line

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.”

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Office: 909.985.9392 or Text Us: 714.657.6634

Kris and Kim Darney – REALTORS® – Grandparents – 909.985.9392 – CA BRE# 01930954; 01464957; 01458057

712,000 US Homes Moved Into Positive Equity in 2017

The average homeowner gained approximately $14,900 in equity during the past year. Compared to Q3 2016, negative equity decreased 22% from 3.2 million homes, or 6.3% of all mortgaged properties. U.S. homeowners with mortgages (roughly 63% of all homeowners) have seen their equity increase by a total of $870.6 billion since Q3 2016, an increase of 11.8%, year-over-year.

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Charts Don't Lie About Housing Affordability
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Charts Don't Lie About Housing Affordability
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There's a lot of discussion about the current state of housing affordability for both first-time and move-up buyers. Much of the narrative is tarnished with a negative slant.
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Kris and Kim Darney - Your REALTORS For Life
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