Taking Advantage of Home Buying Affordability in Today’s Parkland, Coral Springs and Boca Raton Real Estate Market
There is no one formula for the perfect time to purchase a home in your lifetime. Every one of us has our own unique set of life circumstances and financial stability. This means that the actual affordability of owning a home is different for everyone. Understanding how home affordability works and the factors of the current housing market that make an impact on it can help you to determine when the optimal time to buy a home may be.
When looking at home affordability there are three main factors that determine how realistic making a home purchase is:
- Mortgage Rates
- Percentage of Income Going to Mortgage Payment
- Current Home Prices
The National Association of Realtors provides a Housing Affordability Index to help understand how affordable homeownership truly is for the average American. This report takes the three factors above and uses them to come up with an overall affordability score for housing.
The National Association of Realtors states that their report looks at the average income of the American family and measures whether the average family makes enough income to qualify for a mortgage on an average priced home based on national and regional averages according to the most recent price and income stats across the country.
The higher the number on the index, the better the affordability rating. Numbers of 100 or higher mean that the market is pretty affordable for the average American family income. According to this year’s index, homes are more affordable than they have been since the recession and housing crash starting in 2008. This was a time when foreclosures and short sales made up a majority of the housing inventory for sale.
Why are Homes More Affordable Right Now?
Although the price of homes continues to rise around the country making it seem like homeownership is out of reach, the index shows homes being more affordable now for one major factor of the three above factors: historically low mortgage loan interest rates. Based on this one factor alone, purchasing a home is more attainable for families of median income than in the last seven years.
If you have been considering buying a home right now, it is good to know how overall affordability plays a role in your ability to purchase a home. A lower interest rate, even on a higher-priced home, can mean a lower monthly payment and large savings on interest over the life of your entire loan.
Now is a great time to purchase a home. If you are looking to buy a home in Parkland please contact me any time.
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