Today I want to talk to you about the affordability of buying a home in today’s market. As we take a look at the Wasatch Front through the history books, let’s first examine the affordability of a home in 1989.
In 1989, the average price of a home was $94,000. The average mortgage interest rate was 10%, making the average monthly payment around $825, with median incomes hovering around the $30,000 mark.
Fast forward to 2015, and things have changed for the better. Although the average price of homes is up to $208,000, mortgage interest rates are down near 4%, making the average monthly payment of $995 much more affordable to the average person, whose income has risen to $52,250. “In 2014, an average person would only have to spend 15% of their income to purchase a home, the 3rd lowest figure on record.” In 2014, an average person would only have to spend 15% of their income to purchase a home, the 3rd lowest figure on record. From this data, you can see that homes have very rarely been as affordable as they are right now.
One thing we want to make sure you know is that interest rates are going to rise this year. We don’t know when, but we do know that they are low right now. If you want to find out if now is a good time for you to consider making a jump in the market or at least testing the waters, take a look at some homes, and give us a call. We look forward to hearing from you!