Aug 15, 2012 | Housing Analysis
Rising home prices are taking a toll on today’s home buyers. For the first time in 4 quarters — and despite falling mortgage rates — home affordability is sinking.
Earlier this week, the National Association of Home Builders reported the Home Opportunity Index, a measure of home affordability, down to 73.8 for the second quarter of the year. This marks the metric’s first “down” quarter since the second quarter of 2011, and is its lowest reading since December 2010.
A home is considered “affordable” when its payments meet standard mortgage underwriting criteria for families earning the local median income. This definition is used for homes across all U.S. markets — including for homes in Worcester County area.
73.8% of homes sold last quarter were affordable to households earning the national median income of $65,000. This is the 13th straight quarter dating back to 2009 that the index surpassed 70. Prior to 2009, the Home Opportunity Index had not crossed 70 even one time. (more…)
Jul 10, 2012 | Personal Finance
With mortgage rates down to all-time lows, you can buy a lot more home for your money. Home affordability is at an all-time high.
According to last week’s Freddie Mac mortgage rate survey, the average 30-year fixed rate mortgage has dropped to 3.62% nationwide. This is down from 4.08% in March, and down from 4.60% from one year ago.
Mortgage rates are “on sale”.
Falling mortgage rates can make one of two changes to the way a Worcester County area home buyer looks at properties. They can either make a given home’s monthly housing payment that much more affordable to a buyer, or they can expand that buyer’s home purchasing power to a higher, maximum price point.
Since July 2011, that maximum price point increase has been significant. (more…)
Jun 12, 2012 | Mortgage Rates
It’s a money-saving time to be a Worcester County area home buyer. Historically, mortgage rates of all types — conventional, FHA, VA and USDA — have never been lower and low mortgage rates make for low monthly payments.
According to Freddie Mac’s weekly mortgage rate survey, the average 30-year fixed rate mortgage fell to 3.67% nationwide last week for borrowers willing to pay 0.7 discount points at closing, plus a full set of closing costs. 0.7 discount points is a one-time closing cost equal to 0.7 percent of your loan size, or $700 per $100,000 borrowed.
Today’s mortgage rates are a bargain as compared to just 1 year ago.
In early-June 2011, the average 30-year fixed rate mortgage nationwide was higher by 88 basis points, or 0.88%. If you are among the many U.S. homeowners who bought or refinanced a (more…)
May 25, 2012 | Mortgage Rates
For the fifth consecutive week, conforming 30-year fixed rate mortgage rates have dropped to new all-time lows.
According to this week’s Primary Mortgage Market Survey from Freddie Mac, “prime” mortgage applicants willing to pay 0.8 discount points plus closing costs can secure a mortgage rate of 3.78%, on average.
This is a small improvement in rate over last week when the average 30-year fixed rate mortgage rate was 3.79% with 0.7 discount points.
1 discount point is equal to 1 percent of your loan size. (more…)
May 22, 2012 | Housing Analysis
Falling mortgage rates and stagnant home prices are making a positive effect on home affordability nationwide. Never before in recorded history have so many homes been affordable to households earning a moderate annual income.
Last week, the National Association of Home Builders reported the Home Opportunity Index at 77.5 — its highest reading of all-time. The index indicates that more than 3 of every 4 homes sold last quarter were affordable to households earning the national median income of $65,000.
Last quarter marks the 12th straight quarter — dating back to 2009 — in which the index surpassed 70. Prior to this run, the index had never crossed 70 even once.
That said, like most real estate statistics, the Home Affordability Index has a national purview. National data is of little value to homeowners in specific cities such as Worcester County area , or in specific neighborhoods.
Last quarter, home affordability varied by region.
In the Midwest, for example, affordability was highest. 7 of the top 10 most affordable (more…)
