Forget the Price of the Home. The Cost is What Matters.
Forget the Price of the Home. The Cost is What Matters.
![]() Home buying activity (demand) is up, and the number of available listings (supply) is down. When demand outpaces supply, prices appreciate. That’s why firms are beginning to increase their projections for home price appreciation going forward. As an example, CoreLogic increased their 12-month projection for home values from 4.5% to 5.6% over the last few months. The reacceleration of home values will cause some to again voice concerns about affordability. Just last week, however, First American came out with a data analysis that explains how price is not the only market factor that impacts affordability. They studied prices, mortgage rates, and wages from January through August of this year. Here are their findings: Home Prices
Mortgage Interest Rates
Wage Growth
When all three market factors are combined, purchasing power increased by $24,500, thus making home buying more affordable, not less affordable. Here is a table that simply shows the data: Bottom LineIn the article, Mark Fleming, Chief Economist at First American, explained it best:
|
Post a Comment