The last year has put emphasis on the importance of one’s home. As a result, some renters are making the jump into homeownership while some homeowners are re-evaluating their current house and considering a move to one that better fits their current lifestyle. Understanding how housing affordability works and the main market factors that impact it may help those who are ready to buy a home narrow down the optimal window of time in which to make a purchase.
There are three main factors that go into determining how affordable homes are for buyers:
Mortgage Payments as a Percentage of Income
The National Association of Realtors (NAR) produces a Housing Affordability Index. It takes these three factors into account and determines an overall affordability score for housing. According to NAR, the index:
“…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.”
Their methodology states:
“To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.”
So, the higher the index, the more affordable it is to purchase a home. Here’s a graph of the index going back to 1990:The blue bar represents today’s affordability. We can see that homes are more affordable now than they’ve been at any point since the housing crash when distressed properties (foreclosures and short sales) dominated the market. Those properties were sold at large discounts not seen before in the housing market for almost one hundred years.
Why are homes so affordable today?
Although there are three factors that drive the overall equation, the one that’s playing the largest part in today’s homebuying affordability is historically low mortgage rates. Based on this primary factor, we can see that it’s more affordable to buy a home today than at any time in the last eight years.
If you’re considering purchasing your first home or moving up to the one you’ve always hoped for, it’s important to understand how affordability plays into the overall cost of your home. With that in mind, buying while mortgage rates are as low as they are now may save you quite a bit of money over the life of your home loan.
If you feel ready to buy, purchasing a home this summer may save you a significant amount of money over time based on historical affordability trends. Let’s connect today to determine if now is the right time for you to make your move.
David Deem 714-997-3486 Dave@DeemTeam.com Whether you have moved into a brand-new house or to one that previously belonged to another family, you need to put some precautions in place. Here are several items that need your attention to keep you and your family safe. Change the locks The previous owners may have passed on spare keys to their neighbors, relatives or close friends. Even if it’s a brand-new house, the builder may have handed a key to a handyman or worker during the construction stage. To be safe, get all the locks changed and distribute spares only to those you trust. Install a security system Even in safe neighborhoods, a security system is a good precaution to take. You can decide whether you want a high-tech one with all the bells and whistles, or if you’re happy with a few cameras and security lights. Get to know your neighbors Neighbors are invaluable allies. Stop by for a chat and get to know them. They can easily keep an eye on your place but if
David Deem 714-997-3486 Dave@DeemTeam.com Every parent knows the importance of keeping their kids active. In addition to instilling a healthy lifestyle, it also makes your life a whole lot easier after they’ve spent time burning all of their energy. When the weather’s nice, it’s easy enough for the little ones to run around outside, however, that’s not always an option. For this reason, here are a few playroom ideas that can keep the kids busy all year round. Indoor Jungle Gym As they progress from crawlers to climbers, being able to hone their fine motor skills is a crucial part of their development. Fortunately, there are some wonderful children’s furniture companies that specialize in exactly this and offer high-end options for indoor jungle gyms, monkey bars, rope swings and much more. Wiwiurka is one such company that’s well worth checking out. Performance Stage For the kids aspiring to a life on Broadway, there’s nothing better than having their own little stage at home. They
David Deem 714-997-3486 Dave@DeemTeam.com No matter how careful you are, inevitably, you’re going to spill something. Whether it’s red wine on your favorite shirt, tomato sauce on your best tablecloth, or chocolate on the rug, the time will come when you’ll have to move into action fast to remove a stain from clothing or furniture. Here’s a stain-removing guide from Real Simple for some of the most common culprits you’re likely to encounter. Coffee. Stretch the coffee-stained fabric over a bowl and pour boiling water over it from about a foot above. If the coffee included milk or cream, follow up with an oil solvent. Sugar too? Pre-treat the item with a stain remover. Wine. For red wine, start by giving the stain a coating of salt. Then stretch the fabric over a bowl and pour boiling water over it from a foot above. For white wine, run cold water over the stain then spray with a solution of 1 tbsp. of clear dish soap in 10 oz. of water, and dab with an enzyme detergent. Chocolate. F