Housing Affordability Remains High

Dated: May 3 2021

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Homes Are Still Affordable

 

My headline may have shocked you... but just look at the chart above.

 

Let me give you some context: Affordability has three ingredients; the price of a home, the interest rate, and average incomes. A reading of 100 means the average income can afford 100% of the average home price. A reading of 150 means the average income can afford 150% of the average price. 

 

Historically, affordability has hovered around 130. But today, even with prices soaring, it's quite a bit higher. Take a look:

Housing Affordability

This assessment shows us that housing is near the most affordable it has ever been. That might seem shocking, but you just need to look deeper at the data.

 

This is a huge tailwind for the housing market and it's a setup that'll drive home buying for the next few years.

 

Conclusion: home prices continue to soar. But with the data we see today... homes are still affordable.

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John Wieland

My real estate passion began almost 30 years ago. It was Orange County, California 1989, when my friend and I began a property management business. We focused on apartment buildings in lower social-....

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