2 Trends Helping Keep Housing Affordable

I have said this so many times before, but it bears repeating; interest rates are low, sellers are anxious to sell and many homes have been reduced in price over the last couple of months. AND now there is a study that shows wages have increased in the last couple of months! Therefore, this is the perfect time to make that jump to home ownership.  All these positive trends make our buyers market in southwest Florida one that you should definitely take advantage of.  Call me today so we can start the search for your home.  You don’t know how much you can afford until we get you a meeting with a mortgage broker to give you a preapproval letter.  It may be more than you think!

Courtesy of Keeping Current Matters 2019

2 Trends Helping Keep Housing Affordable | MyKCM

Two positive trends have started to emerge that impact the 2019 Spring Housing Market. Mortgage interest rates for a 30-year fixed rate loan have dropped to new lows, right as reports show that wages have increased at their highest rate in decades!

These two factors have helped keep housing affordable despite low supply of houses for sale driving up prices. First American’s Chief Economist, Mark Fleming, explains the impact,

“Ongoing supply shortages remain the main driver of the performance gap as the housing market continues to face an inventory impasse – you can’t buy what’s not for sale.

 However, an unexpected affordability surge, driven primarily by lower-than-anticipated mortgage rates, rising wages and favorable demographics, has boosted housing demand.”

Mortgage interest rates had been on the rise for most of 2018 before reaching their peak in November at 4.94%. According to Freddie Mac’s Primary Mortgage Market Survey, interest rates last week came in at 4.20%.

Average hourly earnings grew at an annual rate of 3.2% in March, up substantially from the 2.3% average pace seen over the last 10 years.

These two factors contributed nearly $6,000 worth of additional house-buying power for median households from February to March 2019, according to First American’s research. Fleming is positive about the prolonged impact of lower rates and higher wages.

“We expect rising wages and lower mortgage rates to continue through the spring, boosting housing demand and spurring home sales.”

Bottom Line

Low mortgage interest rates have kept housing affordable throughout the country. If you plan on purchasing a home this year, act now while rates are still low!

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