Key Factors Affecting Home Affordability
We often see news segments discussing how unaffordable housing has become for many would-be buyers. These stories tend to revolve around the subject of mortgage rates and how they have increased in recent months. While it’s true that Rates are up, we must remember that there are other influencers of affordability such as home prices and wages.
There are three key measures used when determining housing affordability: home prices, mortgage rates, and wages. Let’s take a closer look at each one below.
The primary focus for people discussing homebuying today is mortgage rates. They have increased by four percent since the beginning of the year.
Since mortgage rates have increased, the overall cost of purchasing a home has as well, presenting potential buyers with an obstacle. Many people are now being priced out of the market due to this recent change. Even though it's hard to tell where mortgage rates might go in light of all the current global turmoil, experts predict that they will stay high as long as inflation does.