Some interesting new numbers came out regarding housing, income and prices nationwide.
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To break it down for you, 72.9% of the new and existing homes sold across the nation in the third quarter of this year were affordable to families earning the national median income. While you may be thinking that’s just if one counts all those itty bitty states in the middle, that’s hardly the case. In California, a family earning the median could have afforded a whopping 63.5% of the homes sold this last quarter.
A couple of fun facts. The “easiest” place to live in America is Fairbanks, Alaska where 97.8% of the properties are affordable for the average family. The least affordable? That would be the New York City metro area, with a paltry 23.3% affordability level.
As you may be aware, all of this affordability has not exactly translated into high buyer demand and sales. Why is that? Because affordability and lendability are two different things, with lendability taking into account additional factors apart from one’s income. Housing players are frustrated, as the market needs buyers but the lenders are keeping them on the sidelines due to reasons such as job and credit history, as well as large down payment requirements.
As a prospective buyer looking to get in on the action, it is important to understand where the process is best begun. There are several pillars for loan approval. Some are easy to achieve in today’s market (income requirements, for example) others may prove more difficult (down payment cash, steady job history). By sitting down with a mortgage professional now, you can develop a plan to put in place the pillars that are lacking, helping one to better understand their time frames and responsibilities. Lenders are more than happy to help would-be buyers get on the path, and what’s more, they do it for free!
Housing affordability is high, yet accessibility is low. Five years ago the exact opposite was the case, and look where that got us. Despite conflicting reports, it appears that low prices and attractive interest rates will be with us for a while, a couple of years at least. With that said, the time is now that buyers looking to make their move should plot their course.