The Real Scoop on Home Affordability

2021 is off to a super busy start in housing, just going from where it ended in 2020. Home prices are still appreciating and they will continue to do so all of 2021. So does that mean they become less affordable? Well, you might think so because the media has mistakenly looked at the significant move higher in the median home price, which is currently at 15.5% at the end of 2020. But the median home price does not measure appreciation. Instead, it marks the middle price point of recent home sales. So with a lack of inventory for lower-priced homes, and there is a pretty severe lack of inventory there, it simply pushes more transactions occurring for the higher-priced homes, which then of course pushes along the median home price higher as well.

Actual home price appreciation across the U.S. is currently about 7% year over year, which is great. And it is forecasted to continue along that vein in the 5% to 6% in 2021. Meanwhile, weekly earnings are up more than 5.9% in 2020 versus a year before that. Remember that only a portion of your income that you earn goes towards paying your mortgage. If you have a 5.9% rise in your income that can help offset a little bit of a higher percentage of your income going toward the housing expense as well. This tells us that homes are pretty much more affordable, even though they have appreciated. So don't let the media fool you. Contact me so you can create wealth through your homeownership.

If you have questions, let me know.