It is no secret that housing affordability has been impacted by increasing home prices and rising mortgage rates. Fortunately, there is another factor that contributes to the affordability equation: Wages.
The amount of money a family earns determines the level of difficulty they will have affording a new home. With an improving economy, wages are increasing. An increase in wages gas a positive impact on home affordability.
Below is a chart from the Nation Association of Realtors' (NAR) showing the current wages compared to last year's wages:
After plugging in current salaries, home prices, and mortgage rates into the Affordability Index equation, the index is lower than this time last year, however it has increased over the last month (from 141.2 to 146.7).
Whether you are a first time buyer, or you are looking for a move-up home, lets get together! One of our PorchLight agents will help you find the perfect home in your budget.