Welcome to the AllIdahoFallsRealEstate.com Blog

2019-10-30 10:02:33
How to Determine If You Can Afford to Buy a Home in Idaho Falls

 

How to Determine If You Can Afford to Buy a Home | MyKCM

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 that equation: mortgage interest rates.

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

Here are three reports validating that purchasing a home is in fact more affordable today than it was a year ago:

CoreLogic’s Typical Mortgage Payment

“Falling 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’s median-priced home – what we call the “typical mortgage payment”– fell year-over-year again.”  

The National Association of Realtors’ Affordability Index

“At the national level, housing affordability is up from last month and up from a year ago…All four regions saw an increase in affordability from a year ago…Payment as a percentage of income was down from a year ago.”

First American’s Real House Price Index (RHPI)

“In 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 – 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.”

Bottom Line

Though the price of homes may still be rising, the cost of purchasing a home is actually falling. If you’re thinking of buying your first home or moving up to your dream home, let’s connect so you can better understand the difference between the two. The Cindy Bates Group can answer all your questions and get you on the road to home ownership in Idaho Falls.

 
Blog Archive
2020-02-20 14:52:08
New Homes on the Market And Southeast Idaho Events!

2020-02-20 12:22:26
Active Listings in Southeast Idaho

2020-02-13 12:50:00
Global Events affecting Idaho Falls Market

2020-02-11 15:22:53
Homeownership Rate on the Rise to a 6-Year High

2020-02-10 11:16:11
Take a look at The #1 Move In State!!

2020-02-04 10:04:37
Do you think Gender plays a role when investing in Idaho Falls?

2020-01-28 09:43:15
Should You Sell Your Idaho Falls House This Year?

2020-01-27 15:17:10
First-Time Idaho Falls Buyers Are Searching for Existing Homes This Year

2020-01-22 09:34:58
Idaho Falls Buyers Can Win By Downsizing in 2020

2020-01-21 10:56:25
The 2 Surprising Things Idaho Falls Homebuyers Really Want

2020-01-16 09:58:32
Housing Inventory Vanishing: What Is the Impact on You in Idaho Falls?

2020-01-15 15:02:31
Idaho Falls home buyers increasing their Wealth!

2020-01-14 10:36:23
2020 Luxury Market in Idaho Falls

2020-01-10 11:19:19
Your Hometown Lowdown: True Love Skincare with Tricia Barnes

2020-01-09 11:37:27
There’s a Long Line of Buyers Waiting for Your Idaho Falls House

2020-01-08 12:45:47
Is The New Spring Real Estate Market Here in Idaho Falls?

2020-01-07 22:20:44
Big Demand for Small Homes Coming to Idaho Falls?

2019-12-30 16:20:16
For Sale By Owner? Give us a Call first!

2019-12-18 15:27:01
The Biggest Issue Facing Housing Next Year in Idaho Falls

2019-12-10 09:53:05
What difference Does a Year Make in Idaho Falls?

2019-12-09 20:37:52
Have You Budgeted for Idaho Falls Closing Costs?

2019-12-04 10:45:51
Is A Bigger Idaho Falls House Within Your Budget?

2019-12-03 14:58:29
Winter Sales in Idaho Falls

2019-11-27 14:19:24
Tips to Sell Your Home Faster in Idaho Falls

2019-11-26 10:04:11
Owning Your Own Idaho Falls Home

Click here to see ALL articles.


Comment on this Article

Your Name:
Your Email:
Comments:
Verify:  Please enter the numbers shown to help eliminate spam.