Surprising Highs – Encouraging Lows
Home prices and values have been making news and homeowners are building equity:
The amount the median U.S. home price increased year-over-year as of October 2017
The number of consecutive months that home prices have risen by at least 6%
The rate of home value increases considered to be “normal”
Even with skyrocketing prices, housing affordability is up according to the National Association of Realtors’ historic Housing Affordability Index (HAI). This chart shows housing affordability is much higher as of August 2017 today than in pre-housing bubble years:
About the HAI: An index above 100 signifies that a family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home with 20 percent down payment. For example, an HAI of 120.0 means a family earning the median income has 120% of the income necessary to qualify for a conventional loan covering 80 percent of a median-priced existing single-family home.
Though inventory shortages have been challenging for some potential home buyers, it requires less income to purchase a home than it has in years past:
Delinquencies and foreclosure activity has receded considerably:
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Sources: Zillow, National Association of Realtors (NAR), Black Knight Financial Services (BKFS), ATTOM Data Solutions