Do you want content like this delivered to your inbox?
Share

Important Distinction: Homes Are Less Affordable, Not Unaffordable

Share

Important Distinction: Homes Are Less Affordable, Not Unaffordable

Andy Rose

Andy brings to the table 8 years of real estate experience including becoming a licensed Georgia broker in 2018 and a licensed Broker in Florida ...

Andy brings to the table 8 years of real estate experience including becoming a licensed Georgia broker in 2018 and a licensed Broker in Florida ...

Oct 21 4 minutes read

It’s impossible to research the subject of buying a home without coming across a headline declaring that the fall in home affordability is a crisis. However, when we add context to the most recent affordability statistics, we soon realize that, though homes are less affordable than they have been over the last few years, they are more affordable than they historically have been.

Black Knight, a premier provider of data and analytics for the mortgage industry, just released their latest Monthly Mortgage Monitor which includes a new analysis of the affordability situation. Here’s what the report reveals:


“The monthly payment required to purchase the average priced home with a 20% down 30-year fixed rate mortgage increased by nearly 20% (+$210) over the first nine months of 2021, . . . It now requires 21.6% of the median household income to make the monthly mortgage payment on the average home purchase, the least affordable housing has been since 30-year rates rose to nearly 5% back in late 2018.”


Basically, the report shows that homes are less affordable today than at any other time in the last three years. However, in a previous report earlier this year, Black Knight calculated that the percentage of the median household income to make the monthly mortgage payment on the average home purchase over the last 25 years was 23.6% (see graph below):Important Distinction: Homes Are Less Affordable, Not Unaffordable | MyKCM

Today’s payment-to-income ratio is more affordable than the average over the last 25 years. Given that context, we can see that American households still have the same ability to be homeowners as their parents did 20 years ago.

This confirms the recent analysis of ATTOM Data resources where Todd Teta, Chief Product and Technology Officer, explains:


“The typical median-priced home around the U.S. remains affordable to workers earning an average wage, despite prices that keep going through the roof. Super-low interests and rising pay continue to be the main reasons why.”


Bottom Line

It’s true that it’s less affordable to buy a home today than it has been the last few years. However, it’s more affordable to buy today than the average over the last 25 years. In other words, homes are less affordable, but they’re not unaffordable. That’s an important distinction.

Are you a Veteran? 

Let us help!


As a Veteran, we specialize in helping Veterans utilize their VA Home Loan Benefits. 

Check out our Veteran's Page.

VA Home Loan Benefits

Andy sold it quickly after it sat with another agent!

Our home had been on the market for 4 months with a previous agent. My husband found Andy on a real estate group. Andy was very knowledgeable in my area. He suggested making a few minor updates and listed our house for $30k more than it was previously listed for. It took Andy about 2 weeks after listing it to get 2 offers on my house. We finally closed on our house after an offer of only $5K off of ask.

Verified by RateMyAgent

Now partnered with Corcoran

Andy Rose is now partnered with Corcoran Reverie in Florida. 

Corcoran Reverie is known for their knowledge and experience with luxury beach properties along Florida's panhandle. Your beach home search starts here: www.YourEmeraldCoast.com

We use cookies to enhance your browsing experience and deliver our services. By continuing to visit this site, you agree to our use of cookies. More info