Never before has there been a better or more affordable time than right now to buy a home. One of those reasons is undoubtedly the unprecedented rock bottom mortgage rates of 4.4 percent on a 30- fixed rate. Couple that with the median household income currently twice the income necessary to buy the current median-priced home, there is no denying this is absolutely a buyer’s market.
During the housing bubble, NAR’s Housing Affordability Index stayed only slightly above 100, leaving home buyers barely able to meet the requirements to qualify for a home purchase. Given modest gains in the job market and an unemployment rate that appears to be holding steady, indicators suggest we may see some continual improvement. NAR’s Housing Affordability Index rose 13.6 percentage points in January to 166.8, a new record high.
Everybody understands that housing markets fluctuate across the country. Las Vegas, known to be probably the weakest market in the country right now, taking a 60 percent nose dive. While some of the stronger markets such as New York experience only minimal price reductions, nationally affordability conditions are at record highs and that is great news.
With the stimulus incentives behind us, there are many who speculate home prices may still fall further still. Those who can buy, are. Investors and all-cash buyers are staying in the market as well as those seeking to take advantage of the low housing prices and mortgage rates. Lower interest rates equate directly to the buyer’s monthly bottom line. A low interest rate like we are seeing now will have a far greater impact to the buyer than lowering the purchase price a few thousand dollars.
While we can’t deny that home sales have slowed since the expiration of the stimulus band-aid, buyers are still expected to respond to this increased affordability factor. Existing home sales rose in the month of August. According to NAR, pending home sales have increased for the second consecutive month.
If buyers weren’t ready to step up before, I can’t imagine them staying idle for long. September is traditionally a bleak month in the stock market, yet this September was the best September in 71 years. This kind of confidence will only bring more buyers to the market.
According to the Bureau of Labor Statistics, the number of unemployed persons, at 14.8 million, was essentially un-changed in September, and the unemployment rate held at 9.6 percent; however this number pales in comparison to that at the height of the recession. On a bright note, private-sector payroll employment continued to trend up modestly (+64,000).
Only time will tell but as we already know, fall and winter typically are less active seasons in real estate. I suspect this season will have more to show for itself Buyers have several things going for them; plenty of inventory, incredible interest rates and an economy that at least appears to be maintaining, making this time ripe for the buyers’ picking.
The Help Program will help you 208-938-4032 | 208 S. Academy Ave. #170, Eagle, Idaho 83616Boise Idaho Real Estate Expert
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