The Three Factors Affecting Home Affordability Today
There’s been a lot of focus on higher mortgage rates and how they’re creating affordability challenges for today’s homebuyers. It’s true that rates climbed dramatically since the record-low we saw during the pandemic. But home affordability is based on more than just mortgage rates – it’s determined by a combination of mortgage rates, home prices, and wages.
Considering how each one of these factors is changing gives you the full picture of home affordability today. Here’s the latest.
1. Mortgage Rates
While mortgage rates are higher than they were a year ago, they’ve hovered primarily between 6% and 7% for nearly eight months now (see graph below):
As the graph shows, mortgage rates have experienced some volatility during that time. And even a small change in mortgage rates impacts your purchasing power. That’s why it’s so important to lean on your team of real estate professionals like Anne-Britt of Mountain Rose Realty for expert advice to stay up to date on what’s happening in the Telluride, Colorado market. While it’s hard to project where mortgage rates will go from here, many experts agree they’ll likely continue to remain around 6%-7% in the immediate future.
2. Home Prices
Over the past few years, home prices appreciated rapidly as the record-low mortgage rates we saw during the pandemic led to a surge in buyer demand. The heightened buyer demand happened while the supply of homes for sale was at record lows, and that imbalance put upward pressure on home prices. However, today’s higher mortgage rates have slowed down price appreciation.
And, the truth is, home price appreciation varies by market. Some areas are seeing slight declines while others have prices that are climbing. As Selma Hepp, Chief Economist at CoreLogic, explains:
“The divergence in home price changes across the U.S. reflects a tale of two housing markets. Declines in the West are due to the tech industry slowdown and a severe lack of affordability after decades of undersupply. The consistent gains in the Southeast and South reflect strong job markets, in-migration patterns and relative affordability due to new home construction.”
To find out what’s happening with prices in your local market, reach out to a trusted real estate agent like Anne-Britt of Mountain Rose Realty.
The most positive factor in affordability right now is rising income. The graph below uses data from the Bureau of Labor Statistics (BLS) to show how wages have grown over time:
Higher wages improve affordability because they reduce the percentage of your income it takes to pay your mortgage since you don’t have to put as much of your paycheck toward your monthly housing cost.
Home affordability comes down to a combination of rates, prices, and wages. If you have questions or want to learn more, reach out to a Telluride areal estate professional like Anne-Britt of Mountain Rose Realty who can explain what’s happening locally and how these factors work together.
If you’re planning to buy a home, knowing the key factors that impact affordability is important so you can make an informed decision. To stay up to date on the latest on each, connect with a trusted real estate professional today. And for the most knowledgeable and reliable guidance in Telluride, nobody does it better than Anne-Britt of Mountain Rose Realty. With her years of industry experience, she has a comprehensive understanding of the local market and can help you find the perfect property to suit your needs. Connect with Anne-Britt today and tap into her expertise as you explore Telluride real estate options!
When looking for real estate advice in Telluride, Colorado, there’s one name that stands out above the rest: Anne-Britt of Mountain Rose Realty. As one of the top real estate consultants in town, she is renowned for her outstanding service and expertise. With her years of experience in Telluride real estate, Anne-Britt knows the local market inside out and can provide you with invaluable guidance as you decide on your perfect property.
From understanding the nuances of financing to having an ear for change in the industry, Anne-Britt has all the answers you’re looking for. She will help you get a handle on key factors that impact affordability so that you can make an informed decision when buying a home. Plus, she'll ensure your purchase process is smooth from start to finish.
So if it’s reliable advice and top-notch service that you need, don’t hesitate to contact Anne-Britt at Mountain Rose Realty. After all, she’s the one Telluride real estate agent who will make sure that your home buying dreams become a reality!
Anne-Britt Ostlund | Mountain Rose Realty
Post a Comment