As many Americans feel a strong sense of economic growth, achieving the American Dream of Homeownership still feels out of reach. According to a survey with the National Association of Realtors, 68% of consumers said now is a good time to buy a home. This is down from 72% last year and at the lowest point within the past two years. The statistics show even lower for Renters surveying in at 55% saying now is a good time to buy a home.
Of course, this is a national average and some parts of the region may have a more optimistic outlook than others, say Metro areas vs. inland Midwest areas.
The shortage of homes For Sale and the rising home prices along with the mortgage rates shooting up at a four-year high these last few months make it very difficult for a Buyer to compete with affordability. Putting things in to perspective, I think interest rates are still low at the levering 5% compared to just a few decades ago at 18.5%.
The troublesome may also realize that the healthiest labor markets are those vested in major metro areas with affordability pressures. While you have a stable career, one also need to consider saving up for the down payment. Non-homeowners responded that some things keeping them from saving up for a down payment include 47% saying limited income, 30% saying student loan debt, 28% saying rising rents and 14% saying health and medical costs.
Aside from above, homeowners believe now is a good time to sell tallying in at 74%. Majority of homeowners have sizable equity gains since the 2007-2008 era. I think the housing supply would improve significantly if a respectable amount of homeowners decide to sell this Spring 2018.
It’s never too early or too late to sit down with a Realtor and a Lender to discuss your financial situation. Homeownership is a much more achievable goal once you know exactly what you can afford to buy and look in to Markets that fit your lifestyle. Preparation is key, planning is part of it so lets pave the path towards homeownership together!
*** First American Finance Corp., which measures affordability by comparing home prices with the rate of inflation and the current interest rates, found that it is actually historically affordable to buy a home. The index showed while home prices are increasing, “real house prices,” or its affordability measure, are down a full 35.8% from the housing boom peak and 13.8% from the January 2000 price levels.