Are you unsure about whether you can afford to buy a home? Headline suggests homes have become affordable for most Americans. In reality, there’s hard evidence that shows how owning a home is more affordable than renting in most parts of the country and here in the Charleston market, as record-low interest rates are keeping monthly mortgage payments about 23% lower than the typical payment of 20 years ago. In a recent survey by realtor.com, home shoppers indicated they were surprised by what they could actually afford when buying their first home. In fact, 47% discovered their budget was larger than they expected. George Ratiu, Senior Economist at realtor.com, explains: "For first-time buyers, especially, the drop in the 30-year mortgage rate…has provided unexpected leverage. Lower rates allowed many buyers to stretch and buy more expensive homes while keeping their monthly budget the same."
For example, here’s the typical mortgage payment for assorted dates going back to 2000, as calculated by CoreLogic: Outside of the housing crash (when short sales and foreclosures drove prices down), it’s more affordable to buy a home today when you consider all three elements of the affordability equation: price, income, and mortgage rate.
Whether you’re a first-time buyer or a move-up buyer, don’t automatically think you are not able to buy your dream home before you even try; Instead, connect with us today to determine what you can afford and what’s available at that price. Like almost half of the buyers in the survey and many of the buyers that we work with, you may be pleasantly surprised.