Recently, multiple headlines have been written asserting that homeownership is less affordable today than at any other time in the last decade. Though the headlines are accurate, they lack context and lead too many Americans to believe that they can’t partake in a major part of the American Dream –owning a home.
In 2008, the housing market crashed and home values fell by as much as 60% in certain markets. This was the major trigger to the Great Recession we experienced from 2008 to 2010. To come back from that recession, mortgage interest rates were pushed down to levels that were never seen before.
For the last ten years, you could purchase a home at a dramatically discounted price and attain a mortgage at a historically low mortgage rate.
Now that home values have returned to where they should be, and mortgage rates are beginning to increase, it is less affordable to own a home than it was over the last ten years.
If you take out the years after the crash, affordability today is greater than it has been at almost any time in American history.
This has not been adequately reported which has led to many Americans believing that they cannot currently afford a home.
As an example, the latest edition ofFreddie Mac’s Research: Profile of Today’s Renterreveals that 75% of renters now believe it is more affordable to rent than to own their own homes. This percentage is the highest ever recorded. The challenge is thatthis belief is incorrect.Studyafterstudyhas proven that in today’s market, it is less expensive to own a home than it is to rent a home in the United States.
Thankfully, some are starting to see this situation and accurately report on it. TheNational Association of Realtors, in their2019 Housing Forecast, mentions this concern:
“While the U.S. is experiencing historically normal levels of affordability, potential buyers may be staying out of the market because of perceived problems with affordability.”
If you are one of the many renters who would like to own their own homes, talk to a local real estate professional to find out if homeownership is affordable for you right now.
CENTURY 21 Arizona Foothills began its real estate journey in 1988 as a small, non-branded boutique office with just four agents called Ahwatukee Foothills Realty. Over a year later, we joined the CENTURY 21 family and began growing our company. Currently, CENTURY 21 Arizona Foothills has seven strategically placed branch offices and three satellite offices to serve the entire Greater Phoenix area.
The real estate market is always changing and as a result, our agents regularly attend training sessions and events to further their knowledge and be sure that they are focusing on current conditions that affect today's buyers and sellers. Our goal is to make sure that we satisfy the special needs of all our clients and at the same time make the process and transactions g o as smoothly as possible.
"Working with my Century 21 Arizona Foothills agent has been a true pleasure. I relocated to the Phoenix area and quickly determined that the Gilbert area was a great fit for my family after meeting with our agent. Our agent was able to explain the Arizona real estate market to us and help us narrow down our home search based on our criteria. We love our new home in Gilbert and would recommend Century 21 Arizona Foothills to anyone!"