You’ve seen the headlines: Buying a home is less affordable today than in the last 10 years. While this is true, when we dive in deeper and take a better look at the situation, things change a bit.
The reason we have less affordability now is because of our past market. Over the last 10 years, it was full of foreclosures, short sales, and distressed properties. These listings were selling at discounts upward of 50%, which skewed the market numbers.
If you look back further than 10 years, however, we see a different story. What it boils down to is that homes are actually more affordable today.
The National Association of Realtors puts out a monthly index—the higher the number, the more affordable homes are. The number for March is 147.6. It was higher over the last 10 years, peaking at 197 in 2012. Between 1990 and 2007, however, the average index was only 123. In the big picture, homes are still very affordable.
Don’t fall for the myths—get the details.
If you have any questions or would like more information, feel free to reach out to me. I look forward to hearing from you soon.