{"id":8018,"date":"2023-04-26T10:30:00","date_gmt":"2023-04-26T10:30:00","guid":{"rendered":"https:\/\/thezakariagroup.com\/the-three-factors-affecting-home-affordability-today\/"},"modified":"2023-04-26T10:30:00","modified_gmt":"2023-04-26T10:30:00","slug":"the-three-factors-affecting-home-affordability-today","status":"publish","type":"post","link":"https:\/\/thezakariagroup.com\/the-three-factors-affecting-home-affordability-today\/","title":{"rendered":"The Three Factors Affecting Home Affordability Today"},"content":{"rendered":"
\"The<\/p>\n

There\u2019s been a lot of focus on higher mortgage rates and how they\u2019re creating affordability challenges for today\u2019s homebuyers. It\u2019s true that rates climbed<\/a> dramatically since the record-low we saw during the pandemic. But home affordability is based on more than just mortgage rates \u2013 it\u2019s determined by a combination of mortgage rates, home prices, and wages.<\/p>\n

Considering how each one of these factors is changing gives you the full picture of home affordability today. Here\u2019s the latest.<\/p>\n

1. Mortgage Rates<\/strong><\/h4>\n

While mortgage rates are higher than they were a year ago, they\u2019ve hovered primarily between 6% and 7% for nearly eight months now (see graph below<\/em>):<\/p>\n

<\/a><\/p>\n

As the graph shows, mortgage rates have experienced some volatility during that time. And even a small change<\/a> in mortgage rates impacts your purchasing power. That\u2019s why it\u2019s so important to lean on your team of real estate professionals for expert advice to stay up to date on what\u2019s happening in the market. While it\u2019s hard to project where mortgage rates will go from here, many experts agree<\/a> they\u2019ll likely continue to remain around 6%-7% in the immediate future.\u00a0<\/p>\n

2. Home Prices<\/strong><\/h4>\n

Over the past few years, home prices<\/a> appreciated rapidly as the record-low mortgage rates we saw during the pandemic led to a surge in buyer demand. The heightened buyer demand happened while the supply of homes for sale was at record lows, and that imbalance put upward pressure on home prices. However, today\u2019s higher mortgage rates have slowed down price appreciation.<\/p>\n

And, the truth is, home price appreciation<\/a> varies by market. Some areas are seeing slight declines while others have prices that are climbing. As Selma Hepp, Chief Economist at CoreLogic<\/em>, explains<\/a>:<\/p>\n

\u201cThe divergence in home price changes across the U.S. reflects a tale of two housing markets. Declines in the West are due to the tech industry slowdown and a severe lack of affordability after decades of undersupply. The consistent gains in the Southeast and South reflect strong job markets, in-migration patterns and relative affordability due to new home construction.\u201d<\/em><\/p><\/blockquote>\n

To find out what\u2019s happening with prices in your local market, reach out to a trusted real estate agent.<\/p>\n

3. Wages<\/strong><\/h4>\n

The most positive factor in affordability right now is rising income. The graph below uses data<\/a> from the Bureau of Labor Statistics <\/em>(BLS) to show how wages have grown over time:\u00a0<\/p>\n

<\/a><\/p>\n

Higher wages improve affordability because they reduce the percentage of your income it takes to pay your mortgage since you don\u2019t have to put as much of your paycheck toward your monthly housing cost.<\/p>\n

Home affordability comes down to a combination of rates, prices, and wages. If you have questions or want to learn more, reach out to a real estate professional who can explain what\u2019s happening locally and how these factors work together.<\/p>\n

SBottom Line<\/h3>\n

If you\u2019re planning to buy<\/a> a home, knowing the key factors that impact affordability is important so you can make an informed decision. To stay up to date on the latest on each, connect with a trusted real estate professional today.<\/p>\n<\/div>\n

Powered by WPeMatico<\/a><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

There\u2019s been a lot of focus on higher mortgage rates and how they\u2019re creating affordability challenges for today\u2019s homebuyers. It\u2019s true that rates climbed dramatically since the record-low we saw during the pandemic. But home affordability is based on more than just mortgage rates \u2013 it\u2019s determined by a combination of mortgage rates, home prices, […]<\/p>\n","protected":false},"author":101010,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[98,99,102,104,101,108],"tags":[],"jetpack_publicize_connections":[],"yoast_head":"\nThe Three Factors Affecting Home Affordability Today - The Zakaria Group<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/thezakariagroup.com\/the-three-factors-affecting-home-affordability-today\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Three Factors Affecting Home Affordability Today - The Zakaria Group\" \/>\n<meta property=\"og:description\" content=\"There\u2019s been a lot of focus on higher mortgage rates and how they\u2019re creating affordability challenges for today\u2019s homebuyers. 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