According to CNN Money, home buying has not been more affordable in more than 20 years. The National Association of Realtors states that they have never seen better housing affordability conditions or market opportunities than now, and they have been tracking affordability since 1970.
We are currently experiencing the perfect storm of home affordability due to extremely low interest rates, declining housing prices, reduced buying activity and a surplus of home inventory. Let’s explore each of these areas and see how they affect home affordability and how they combine to bring us the greatest buying opportunity of your lifetime. The links to the articles I have referenced will be noted at the bottom of this article.
Low interest rates may be the number one factor affecting home affordability. USA Today and Freddie Mac just reported that average mortgage interest rates in the US are at their lowest level on record. This is the lowest average rate since long-term mortgages began in the 1950’s. Low mortgage rates are key, because they drastically affect your purchasing power.
The S&P/Case-Shiller Home Price index took a turn from annual declines to annual increases in April 2012 for most of the cities measured. It has been a long time since we have enjoyed broad based gains, even if they were modest at 1.3% for the year. We are currently at 2002 home price levels per the US composite index. The Core Logic Home Price Index is reporting a third consecutive, monthly increase in home prices with a 2% price gain from May 2011 to May 2012.
There may not be a better time in your life to buy real estate. You need to act quickly before this opportunity disappears. Call us today to guide you through your next investment. After all the real estate market is back and interest rates will not be this low forever. Call Steve at 206-552-9577.