Home Prices are Increasing- Are Homes Less Affordable?admin / 0 Comments /
Real Estate professionals and publications have recently began to educate home owners and potential home buyers with current market trends. The common message is that there is an increase in home buyers but the supply of homes for sale is declining. The natural consequence of this low supply and high demand situation is for home prices to increase. The projected home values are continuing to increase, in fact experts have even adjusted their projections based on current market reports. According to an article published in The Patch, “CoreLogic increased their 12-month projection for home values from 4.5% to 5.6% over the last few months.”
Naturally, buyers become concerned that home prices are causing them to be priced out of a home or a neighborhood. However, the increase in home prices can’t be analyzed in a bubble. Other factors must be taken into account to determine whether or not increasing home prices are really making homes unaffordable.
In the article, written by Keith Kreis, other factors that should also be taken into consideration are discussed. For example, mortgage interest rates have dropped since the beginning of 2019 which has increased home affordability by almost 10 percent. Additionally, American workers are seeing wage growth by as much as 1.5% since last fall. By taking these additional economic factors into consideration, one might argue that, at this point in time, buying a home is more affordable than its been.
Read the entire article.