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    It’s Not Just About the Price of the Home

    It’s Not Just About the Price of the Home | MyKCM

    When most of us begin searching for a home, we naturally start by looking at the price. It’s important, however, to closely consider what else impacts the purchase. It’s not just the price of the house that matters, but the overall cost in the long run. Today, that’s largely impacted by low mortgage rates. Low rates are actually making homes more affordable now than at any time since 2016, and here’s why.

    Today’s low rates are off-setting rising home prices because it’s less expensive to borrow money. In essence, purchasing a home while mortgage rates are this low may save you significantly over the life of your home loan.

    Taking a look at the graph below with data sourced from the National Association of Realtors (NAR), the higher the bars rise, the more affordable homes are. The orange bars represent the period of time when homes were most affordable, but that’s also reflective of when the housing bubble burst. At that time, distressed properties, like foreclosures and short sales, dominated the market. That’s a drastically different environment than what we have in the housing market now.

    It’s Not Just About the Price of the Home | MyKCM

    The green bar represents today’s market. It shows that homes truly are more affordable than they have been in years, and much more so than they were in the normal market that led up to the housing crash. Low mortgage rates are a big differentiator driving this affordability.

    What are the experts saying about affordability?

    Experts agree that this unique moment in time is making homes incredibly affordable for buyers.

    Lawrence Yun, Chief Economist, NAR:

    “Although housing prices have consistently moved higher, when the favorable mortgage rates are factored in, an overall home purchase was more affordable in 2020’s second quarter compared to one year ago.”

    Bill Banfield, EVP of Capital Markets, Quicken Loans:

    “No matter what you’re looking for, this is a great time to buy since the current low interest rates can stretch your spending power.”

    Mortgage News Daily:

    “Those shopping for a home can afford 10 percent more home than they could have one year ago while keeping their monthly payment unchanged. This translates into nearly $32,000 more buying power.”

    Forbes:

    “Homeowners are the clear winners. Low mortgage rates mean the cost of owning is at historically low levels and who gains all the benefits of strong house price appreciation? Homeowners.”

    Bottom Line

    When purchasing a home, it’s important to think about the overall cost, not just the price of the house. Homes on your wish list may be more affordable today than you think. Let’s connect to discuss how affordability plays a role in our local market, and your long-term homeownership goals.

    Posted in: Buying a Home, Real Estate, Selling a Home

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    About Austin Properties Group

    Every single member of our staff lives and breathes Austin, Texas. Truly, we wouldn’t want to be doing this anywhere else. We love our city, and we want you to fall in love with it too. We work with the Texas spirit of hospitality in mind. We are not happy until you are happy. Whatever your request, big or small, we will work with you until you are completely satisfied. Why will every member of Austin Properties Group make every effort humanly possible to ensure your real estate goals are achieved? Because we really care. We care about this city and we care about you. We want you to feel at home in Austin as soon as possible. We are a unique firm and we are proud to be a part of keeping Austin weird.

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    Austin Properties Group
    (512) 222-3015

    1801 S. Mopac, Ste 100
    Austin, Texas 78746

    info@austinpg.com
    (512) 222-3015
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