Compare Listings

2 Trends Helping Keep Housing Affordable

2 Trends Helping Keep Housing Affordable | Simplifying The Market

Two positive trends have started to emerge that impact the 2019 Spring Housing Market. Mortgage interest rates for a 30-year fixed rate loan have dropped to new lows, right as reports show that wages have increased at their highest rate in decades!

These two factors have helped keep housing affordable despite low supply of houses for sale driving up prices. First American’s Chief Economist, Mark Fleming, explains the impact,

“Ongoing supply shortages remain the main driver of the performance gap as the housing market continues to face an inventory impasse – you can’t buy what’s not for sale.

 However, an unexpected affordability surge, driven primarily by lower-than-anticipated mortgage rates, rising wages and favorable demographics, has boosted housing demand.”

Mortgage interest rates had been on the rise for most of 2018 before reaching their peak in November at 4.94%. According to Freddie Mac’s Primary Mortgage Market Survey, interest rates last week came in at 4.20%.

Average hourly earnings grew at an annual rate of 3.2% in March, up substantially from the 2.3% average pace seen over the last 10 years.

These two factors contributed nearly $6,000 worth of additional house-buying power for median households from February to March 2019, according to First American’s research. Fleming is positive about the prolonged impact of lower rates and higher wages.

“We expect rising wages and lower mortgage rates to continue through the spring, boosting housing demand and spurring home sales.”

Bottom Line

Low mortgage interest rates have kept housing affordable throughout the country. If you plan on purchasing a home this year, act now while rates are still low!

 

img

Katia Hadjiyska

Related posts

Get Your House Ready To Sell This Winter [INFOGRAPHIC]

Some HighlightsAs you get ready to sell your house, there are a few things you should add to your...

Continue reading
by Katia Hadjiyska

Sell Smarter: Why Working with a Real Estate Agent May Beat Going Solo

If you're thinking about selling your house on your own, called “For Sale by Owner” or FSBO,...

Continue reading
by Katia Hadjiyska

Why Mortgage Rates Could Continue To Decline

When you read about the housing market, you’ll probably come across some information about...

Continue reading
by Katia Hadjiyska