If you’ve been following the housing market, you may be seeing that rates are rising and home inventory is low. This means that fewer homeowners are putting their homes up for sale, making the market more competitive while mortgage rates go up. However, American’s may not realize that while rates are rising they are still at historic lows.
This Spring, Trulia released a blog, Not Your Father’s Housing Market, that looked at home affordability over the last 40+ years (1975-2016). Their research found that:
“Nationally, homes are just about the most affordable they’ve been in the last 40 years… the median household could afford a home 1.5 times more expensive than the median home price.”
Affordability has held steady because interest rates remain historically low when looking at rates over the last 40 years. In fact in 1981, interest rates hit 16.1%, nearly (4X) current rates. However, recent trends indicate that low interest rates may not be around forever and the longer you wait, the more expensive homeownership may become.