April 5th, 2011
When it comes to fine kitchens, more bedrooms, storage space, and great features, your chance of getting them all is better than in many previous years. How about a deck and a sunroom?
The recent Housing Affordability Index by the National Association of Realtors is 173.8, or about 40 points lower than in 2008.
How to Qualify
The average price for a single-family home in the index is $170,300. To qualify for that purchase at an interest rate of 5.09 percent, buyers would only need a family income of $34,512.
Another interesting way to look at affordability was shown recently in The Wall Street Journal. The Journal reported that the cost of a home now is equivalent to about 19 months of total income for an average family. Previously, home prices averaged about 24 months of an individual or family income. That means more buyers can afford a home right now.
While the affordability numbers are a good indication, the number of available homes is also a plus. Home buyers can find many in their price range to choose from. Why should they pay high rents when they could be accumulating equity?
What Mortgage Brokers Say
Home ownership is a smart choice when you have reached a stable situation in your life. According to mortgage brokers, that means you have decided on a life path and are taking steps to achieve it, and your income is secure.
When you aren’t moving to another city in the next several years, and you have savings for a down payment, you are ready to move forward with your housing plans.
An idealized vision of how life should be will help you choose a home, but the mortgage brokers say the basic facts to justify The American Dream should be in place.