Throughout the past year, news of rising home prices have dominated news headlines. As a result, many potential homebuyers have pressed pause on searching for a new home; however, this is not the best move in today’s housing market! Home prices may be up, but so is housing affordability.
According to Black Knight, a data and analytics provider for the mortgage industry, the percentage of income needed to buy an average-priced home is significantly lower than that of previous years. In fact, today’s median-priced property only requires about 21.4 percent of an individual’s income, whereas a homebuyer years ago would have needed 26.2 percent of their income to buy a home. In other words, “consumer house buying power” is up, so it’s a good time to begin searching for a home.
Even more surprising is the fact that affordability is not only rising in states with lower average-priced houses, but also throughout states with higher average property values. More specifically, the payment-to-income ratios are well below their 1995-to-2003 state averages in 47 states. The three exceptions are California, Oregon, and Hawaii.
With rising affordability throughout the majority of the country, it’s therefore a great time to begin discussing your options with a lender. For more information about buying a home, or to learn more about home financing in general, contact one of our mortgage specialists today.