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Home affordability improving thanks to low rates

Posted by Mehran Aram on Wed, Aug 7, 2019 @ 06:08 AM

Recent declines in mortgage rates has created millions more potential home buyers. In a new edition of Black Knight’s Mortgage Monitor report, the drop in rates has made home affordability the best it has been in 18 months.

Although home prices continue to increase, less expensive borrowing costs can be an offset. Even small drops in mortgage rates can make a monthly mortgage payment more affordable for home buyers. Black Knight reports that while the average home price has increased by $12,000 since interest rates peaked last November, monthly payments have declined $108 as rates began to retreat.

Lower mortgage rates could spur an increase in home sales as house hunters have more buying power.

Today, conforming no-point 30-year fixed mortgage rates are averaging 3.625 percent and 15-year rates are near 3.125 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: home prices, Interest Rates, Black Knight, Mortgage rates, home affordability, home buyers, Affordability, Borrowing Costs, Monthly Mortgage Payments

Falling mortgage rates make home buying more affordable

Posted by Mehran Aram on Mon, Jul 29, 2019 @ 09:07 AM

Mortgage rates are currently at their lowest point in a year and further declines may be on the horizen. This is making borrowing more affordable for consumers who have been battling rising home prices for years. A new study has found that more than 257,000 Southern Californians could theoretically qualify to buy an entry level home due to today’s low mortgage rates.

The analysis, conducted by John Burns Real Estate Consulting LLC, studied households in Southern California that could now afford to buy a home without exceeding 33 percent of their monthly income on a mortgage payment. Lower mortgage rates helped qualify more than a quarter million residents.

Nonetheless, it remains that less than a third of households in the region can afford an entry-level home.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.00 percent and 15-year rates are near 3.375 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Mortgage rates, home affordability, Low Mortgage Rates

Housing affordability issues affecting more Americans

Posted by Mehran Aram on Sun, Mar 31, 2019 @ 09:03 AM

Home prices are currently less affordable than the historic average in 71 percent of U.S. housing markets. This unsurprising yet concerning revelation comes from ATTOM Data Solutions Q1 2019 U.S. Home Affordability Report. The report analyzed 473 U.S. counties and found that the median home price in 335 were not affordable for the average wage earner.

The report determined affordability for average wage earners by calculating the percent of monthly take-home income needed to pay for a mortgage, property taxes and insurance on a median-priced home assuming a three percent down payment.

San Diego County was among several other California markets deemed the most unaffordable, including Los Angeles and Orange counties.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent, 15-year rates are near 3.625 percent and the 5-year ARM is averaging 4.00 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: San Diego County, Mortgage rates, home affordability, Housing Affordability, California Housing Market, median home price, ATTOM Data Solutions, Affordability

U.S. home affordability drops to 10-year low

Posted by Mehran Aram on Wed, Dec 26, 2018 @ 05:12 AM

A report released last week by ATTOM Data Solutions only confirmed what homebuyers have been feeling for quite some time – affordable homes are increasingly difficult to come by. The Q4 2018 U.S. Home Affordability Report showed that the U.S. median home price during the fourth quarter was at the least affordable level since Q3 2008 – more than a 10-year low.

The index posted a reading of 91, down from 94 in Q3. Readings below 100 suggest that the current median home price is less affordable than the historic average. 357 out of the 469 U.S. counties analyzed in the report had readings below 100.

The silver lining according to a statement made by Darin Blomquist, senior vice president at ATTOM, is that annual wage growth outpaced annual home price appreciation. This includes in high-prices areas such as San Diego.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.625 percent, 15-year rates near 4.0 percent and the 5-year ARM averaging 4.375 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Wages, home affordability, median home price, wage growth

California housing affordability crunch eases slightly

Posted by Mehran Aram on Thu, Nov 29, 2018 @ 05:11 AM

Flat home prices and stable interest rates helped make housing more affordable in the Golden State, says the California Association of Realtors. The trade group reported this week that the percentage of home buyers who could afford to purchase a median-priced existing single-family home in California in the third-quarter climbed one percentage point to 27 percent in the second quarter of 2018.

Based on the current median home price of $588,530, buyers would need an annual income of $125,540 to qualify for most conventional loan products. Should home price appreciation continue to slow, and the strong economy continue to result in rising wages, the affordability factor should see more improvements.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.875 percent, 15-year rates are near 4.25 percent and the 5-year ARM is averaging 4.5 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: California, homebuyers, California Association of Realtors, Mortgage rates, home affordability, Conventional Loans

Home affordability at 10-year low

Posted by The Aramco Group on Wed, Oct 10, 2018 @ 09:10 AM

The American dream of owning a home is more expensive that it’s been at any time in the past decade. A new report from ATTOM Data Solutions on home affordability shows that 84 percent of Americans nationwide could not afford a median-priced home in their county during Q3 2018.

“We’ve reached a tipping point for affordability,” said Daren Blomquist, senior vice president for ATTOM. “Something has to give. Prices cannot climb as quickly as they have been over the last few years.”

Analyzing information from the U.S. Bureau of Labor Statistics, ATTOM found that 30 percent of Americans live in region where they needed a household income of at least $100,000 or more to buy a median-priced home. The study was conducted assuming buyers had at least a three percent down payment and taking out a 30-year fixed-rate mortgage.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.75 percent, 15-year rates are near 4.25 percent and the 5-year ARM is averaging 4.15 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Housing Market, Mortgage rates, household income, home affordability, median price

Home affordability at 10 year low

Posted by The Aramco Group on Sat, Oct 6, 2018 @ 10:10 AM

Home prices in U.S. may not be climbing as fast as they were at the beginning of the year, but new data shows that Americans are still feeling the affordability crunch. ATTOM Data Solutions released its Q3 2018 U.S. Home Affordability Report last week which showed that home prices in the third quarter were at the least affordable level since 2008.

“Rising mortgage rates have pushed home prices to the least affordable level we’ve seen in 10 years, both nationally and at the local level,” said Daren Blomquist, senior vice president at ATTOM. “Close to one-third of the U.S. population now lives in counties where buying a median-priced home requires at least $100,000 in annual income.”

In San Diego County the annual income needed is higher than the national average at $160,745 based on the current median home price in the region of $570,000.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.75 percent, 15-year rates are near 4.25 percent and the 5-year ARM is averaging 4.15 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: San Diego County, home prices, San Diego, home affordability, median price

ARAMCO Report - Thursday May 21, 2015

Posted by Mehran Aram on Thu, May 21, 2015 @ 10:05 AM

Rising home prices may keep homeownership elusive for youth

Prices for existing homes raced higher across the US in April 2015 according to the National Association of Realtors (NAR), but homeownership rates cannot go up unless average household incomes increase too. This may exclude some millennials and other first-time homebuyers from the benefits of homeownership.

Homes became less affordable for first-time homebuyers as the median home price in the US went up 8.9 percent between April 2014 and April 2015, but average wages only increased 2.2 percent over the same time period according to the Bureau of Labor Statistics.

However, average wage growth may be poised to accelerate barring any currently unforeseen challenge to the national economy. Low unemployment rates and falling unemployment assistance claims—announced 5/21/15—signify a solidifying labor market. Unemployment nationally is as low as it has been since May 2008 (5.4 percent), and the four-week moving average for jobless claims fell to its lowest point since 2000.

First-time homebuyers may find that the 3.5 percent down payment, low-rate FHA mortgage would be the right way for them to transition into homeownership. Rates are still near all-time lows.

 

Conforming no point 30-year fixed mortgage rates average 3.875 percent while 15-year rates average 3.125 percent.

Topics: home prices, home ownership rate, 30 year fixed rates, home price appreciation, home affordability