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  • 2 Forces Keeping The Housing Market Affordable

    Tuesday, May 7, 2019   /   by June Quilantang

    2 Forces Keeping The Housing Market Affordable

    Even though the supply of houses has yet to catch up with the demand as we wished it would. Home prices have remained affordable to many of the buyer's delight. This is all thanks to two positive trends we all are enjoying this year.

    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."

    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!  

    Reblogged from: http://bit.ly/2Jv4LAd 


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