The real estate market continues to sizzle, but this reality isn’t necessarily putting a squeeze on home affordability.
Low interest rates to close out 2019 supported the largest single-month acceleration in home prices in several years, according to Black Knight. Even so, home affordability reached a two-year low.
At the confluence of falling interest rates and rising home prices is increased home affordability.
According to Black Knight’s monitor report, home prices reacted to lower interest rates in a positive manner. While the average price of a home has increased by nearly $13,000, the monthly mortgage payment needed to afford a home loan at the level is 10 percent less.
People need to spend about 21 percent of the median monthly income to purchase the same home in 2019 dollars, representing the smallest payment-to-income ratio in two years.
In today’s climate, future homebuyers can afford more home for less, especially with 30-year interest rates as low as it is.
If you have been thinking about making Roseville home, now may be an opportune time to dive into the real estate market. Even though home prices have continued to climb, lower interest rates and greater buying power may mean homes are more affordable than they have been in some time.
Through an FHA or VA loan, applicants can take advantage of lenient borrowing terms, in addition to the market’s favorable climate.
With low interest rates and greater affordability, the VA loan puts eligible buyers in the driver’s seat as it requires no down payment. The FHA loan program is powerful in its own right because of its flexibility.
Contact us today to learn how you can take advantage of the market’s favorable climate and gain extra flexibility and confidence with these mortgage loan programs.