If you are considering selling your current home, to either move up to
a larger home or into a home in an area that better suits your current
family needs, great news was just revealed.
Last week, Trulia posted a blog, Not Your Father’s Housing Market, which examined home affordability over the last 40+ years (1975-2016). Their research revealed that:
“Nationally, homes are just about the most affordable
they’ve been in the last 40 years… the median household could afford a
home 1.5 times more expensive than the median home price. In 1980, the
median household could only afford about 3/4 of the median home price.
Despite relatively stagnant incomes, affordability has grown due
to the sharp drop in mortgage rates over the last 30 years – from a high
of over 16% in the 1980s to under 4% by 2016.
Of the nation’s 100 largest metros, only Miami became
unaffordable between 1990 and 2016. Meanwhile, 22 metros have flipped
from being unaffordable to becoming affordable in that same time frame.”
Here is a graph showing the Affordability Index compared to the 40-year average:
The graph shows that housing affordability is better now
than at any other time in the last forty years, except during the
housing crash last decade.
(Remember that during the crash you could purchase distressed properties – foreclosures and short sales – at 20-50% discounts.)
There is no doubt that with home prices and mortgage rates on the
rise, the affordability index will continue to fall. That is why if you
are thinking of moving up, you probably shouldn’t wait.
If you have held off on moving up to your family’s dream home because you were hoping to time the market, that time has come.