{"id":247,"date":"2019-10-30T21:22:04","date_gmt":"2019-10-30T21:22:04","guid":{"rendered":"http:\/\/phphouses.com\/blog\/?p=247"},"modified":"2019-10-30T21:22:06","modified_gmt":"2019-10-30T21:22:06","slug":"how-to-determine-if-you-can-afford-to-buy-a-home","status":"publish","type":"post","link":"https:\/\/phphouses.com\/blog\/how-to-determine-if-you-can-afford-to-buy-a-home\/","title":{"rendered":"How to Determine If You Can Afford to Buy a Home"},"content":{"rendered":"\n
\"\"
Saving to buy a house or home savings concept with money coin stack growing.Saving money concept.<\/figcaption><\/figure>\n\n\n\n

The gap between the increase in personal income and residential real estate prices has been used to defend the concept that we are experiencing an affordability crisis in housing today.<\/p>\n\n\n\n

It is true that home prices and wages are two key elements in any affordability equation. There is, however, an extremely important third component to that equation: mortgage interest rates<\/em><\/strong>.<\/p>\n\n\n\n

Mortgage interest rates have fallen by more than a full percentage point from this time last year. Today\u2019s rate is 3.75%; it was 4.86% at this time last year. This has dramatically increased a purchaser\u2019s ability to afford a home.<\/p>\n\n\n\n

Here are three reports validating that purchasing a home is in fact more affordable today than it was a year ago:<\/p>\n\n\n\n

CoreLogic\u2019s <\/em>Typical Mortgage Payment<\/a><\/strong><\/p>\n\n\n\n

\u201cFalling mortgage rates and slower home-price growth mean that many buyers this year are committing to lower mortgage payments than they would have faced for the same home last year. After rising at a double-digit annual pace in 2018, the principal-and-interest payment on the nation\u2019s median-priced home \u2013 what we call the \u201ctypical mortgage payment\u201d\u2013 fell year-over-year again.\u201d  <\/em><\/p><\/blockquote>\n\n\n\n

The National Association of Realtors\u2019<\/em> Affordability Index<\/a><\/strong><\/p>\n\n\n\n

\u201cAt the national level, housing affordability is up from last month and up from a year ago\u2026All four regions saw an increase in affordability from a year ago\u2026Payment as a percentage of income was down from a year ago.\u201d<\/em><\/p><\/blockquote>\n\n\n\n

First American\u2019s<\/em> Real House Price Index (RHPI)<\/a><\/strong><\/p>\n\n\n\n

\u201cIn 2019, the dynamic duo of lower mortgage rates and rising incomes overcame the negative impact of rising house price appreciation on affordability. Indeed, affordability reached its highest point since January 2018. Focusing on nominal house price changes alone as an indication of changing affordability, or even the relationship between nominal house price growth and income growth, overlooks what matters more to potential buyers \u2013 surging house-buying power driven by the dynamic duo of mortgage rates and income growth. And, we all know from experience, you buy what you can afford to pay per month.\u201d<\/em><\/p><\/blockquote>\n\n\n\n

Bottom Line<\/strong><\/h3>\n\n\n\n

Though the price<\/em><\/strong> of homes may still be rising, the cost<\/em><\/strong> of purchasing a home is actually falling. If you\u2019re thinking of buying your first home or moving up to your dream home, let\u2019s connect so you can better understand the difference between the two.<\/p>\n\n\n\n

Contact us:
PHP Houses<\/a>
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 519-0719
Fax: (407) 205-1951
email: info@phphouses.com<\/a><\/p>\n\n\n\n

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<\/p>\n","protected":false},"excerpt":{"rendered":"

The gap between the increase in personal income and residential real estate prices has been used to defend the concept that we are experiencing an affordability crisis in housing today. It is true that home prices and wages are two key elements in any affordability equation. There is, however, an extremely important third component to… Finish Reading How to Determine If You Can Afford to Buy a Home<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[36],"tags":[38,10,27,51,9,49,40,12,48,28,17],"_links":{"self":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/247"}],"collection":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/comments?post=247"}],"version-history":[{"count":1,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/247\/revisions"}],"predecessor-version":[{"id":250,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/247\/revisions\/250"}],"wp:attachment":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/media?parent=247"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/categories?post=247"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/tags?post=247"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}