Selling a home can take time, planning, and patience.You may have prepared your home, welcomed showings, answered questions, and waited for the right buyer only to have your listing expire without a
Is Home Affordability Finally Improving? Here’s What You Need to Know
Dated: August 13 2024
Views: 100
Over the past few years, many prospective homebuyers have struggled with high prices and rising interest rates. While affordability is still a challenge, recent trends suggest that things are starting to improve. According to Lawrence Yun, Chief Economist at the National Association of Realtors (NAR):
"Housing affordability is improving ever so modestly, but it is moving in the right direction."
Let’s dive into the three key factors currently influencing home affordability: mortgage rates, home prices, and wages.
1. Mortgage Rates
Mortgage rates have been quite volatile this year, fluctuating between the mid-6% and low-7% range. However, recent data from Freddie Mac shows a positive trend: rates have been trending down since May. This is partly due to economic and employment data signaling cooling inflation.
Even a slight decrease in mortgage rates can significantly impact affordability. Lower rates mean lower monthly payments, making it easier for buyers to afford the home they want. While we may not see rates drop to pre-pandemic levels, the downward trend is a welcome relief for many.
2. Home Prices
Home prices continue to rise, but not as quickly as they did during the pandemic. According to data from Case-Shiller, this slower pace of price appreciation could be good news for buyers who were previously priced out of the market.
Odeta Kushi, Deputy Chief Economist at First American, notes:
"While housing affordability is low for potential first-time home buyers, slowing price appreciation and lower mortgage rates could help – so the dream of homeownership isn’t boarded up just yet."
3. Wages
One of the bright spots in the current economic landscape is the rise in wages. According to the Bureau of Labor Statistics (BLS), wages have been increasing at a faster-than-normal rate. This boost in income can help offset higher home prices and mortgage rates, making it easier for buyers to enter the market.
Bottom Line
While home affordability remains a concern, the combination of declining mortgage rates, slower home price growth, and rising wages offers hope for prospective buyers. If you’re considering purchasing a home, now might be a good time to explore your options.
Ready to take the next step in your homebuying journey? Contact us today to get a personalized home affordability assessment and explore properties in your area. Don’t miss out on this opportunity to make your homeownership dreams a reality!
Shasha Truong & Terri Nguyen Realty Group
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📞Call/Text: 626-893-9617 | 626-315-0025
📨Email: shasha.truong@exprealty.com | terri.nguyen@exprealty.com
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Keywords: Home affordability, mortgage rates, home prices, rising wages, homebuying trends, real estate market 2024, buying a home, real estate investment, Lawrence Yun, NAR.
References:
Lawrence Yun, Chief Economist at the National Association of Realtors (NAR)
Freddie Mac Mortgage Rate Data
Case-Shiller Home Price Data
Bureau of Labor Statistics (BLS) Wage Data
Shasha Truong & Terri Nguyen Realty Group
We are Shasha and Terri, your highly experienced real estate professionals dedicated to turning your real estate goals into reality. Fluent in English and Vietnamese, we bring 27+ years of experience ....
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