A lot of opinions are being formed around misinformation when it comes to this very topic. We have hard evidence that suggest home affordability is currently at levels unseen since the years in which distressed properties dominated the market. In many of our local markets, owning a home is more affordable than renting and this trend will continue if interest rates remain relatively low (3-4%) which is the expectation.
A recent survey by realtor.com, indicated that nearly 50% of first-time homebuyers were surprised at what they could afford and discovered that their budget was higher than expected. As a result of low mortgage rates, there is a little-known secret that sellers don’t necessarily have all the leverage. Buyers do in fact have leverage today.
Keep this in mind, most analysts only consider 2 parts of a 3-part affordability equation: price and income. Without the 3rd part, mortgage rates, the equation does appear bleak; but the reality is, to fully understand home affordability, you must consider the entire equation. Remember, affordability is about the cost of the home, not the price.