2 Charts That Show the Truth about Home Affordability

2 Charts That Show the Truth about Home Affordability | Simplifying The Market

There is a lot of discussion about the current state of housing affordability for both first-time and move-up buyers, and much of the narrative is tarnished with a negative slant. However, the truth is that housing affordability is better today than at almost any time in our history.

The naysayers are correct in the fact that affordability today is not as good as it has been over the last several years. But, we must remember that home prices collapsed during the housing crash, and distressed properties (foreclosures and short sales) kept home values depressed for years. When we compare affordability to the decades that proceeded the crash, a different story is revealed.

Here is a graph of the National Association of Realtors’ Housing Affordability Index. The higher the graph, the more affordable homes are.

2 Charts That Show the Truth about Home Affordability | Simplifying The Market

We can see that affordability is better today than in the fifteen years prior to the boom and bust.

CoreLogic just published a report showing the National Homebuyers’ “Typical Mortgage Payment.” Here is a graph of their findings:

2 Charts That Show the Truth about Home Affordability | Simplifying The Market

It reveals that, though a ‘typical’ housing payment was less expensive in 2012 (remember distressed properties), it is currently less expensive than it was in 2000 and is still projected to be lower next year than it was in 2000.

Bottom Line

Mark Fleming, Chief Economist at First American, explained it best:

“While borrowing power for the potential home buyer has fallen relative to the low point of 2012, it remains high today and will remain high next year, relative to the long run average. If you don’t want to rent anymore and are considering becoming a homeowner, even if mortgage rates rise next year, your borrowing power will remain strong by historic standards.”

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5136 E Evergreen Street, Mesa 85205, Northpointe 2 Amd Lot 1001-1152

  • $170,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,110
  • Lot size: 1,068
  • Year built: 1986
  • MLS #: 5869909
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11265 E Cicero Street, Mesa 85207, Dave Brown AT Mountain & University

  • $209,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,539
  • Lot size: 5,375
  • Year built: 1999
  • MLS #: 5814254
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449 S 93rd Way, Mesa 85208, Wynstone

  • $219,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,323
  • Lot size: 5,493
  • Year built: 1997
  • MLS #: 5839683
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352 Leisure World --, Mesa 85206, Leisure World Golden Hills Plat 4 Cond Plan Amd

  • $199,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,502
  • Lot size: 2,051
  • Year built: 1974
  • MLS #: 5835916
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220 S Trenton --, Mesa 85208, Sienna Estates

  • $220,000
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,436
  • Lot size: 3,169
  • Year built: 2007
  • MLS #: 5851454
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253 S Trenton --, Mesa 85208, Sienna Estates

  • $223,000
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,581
  • Lot size: 2,734
  • Year built: 2007
  • MLS #: 5870259
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125 N Sunvalley Boulevard, Mesa 85207, Sanctuary ON Sunvalley

  • $212,000
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,455
  • Lot size: 1,190
  • Year built: 2017
  • MLS #: 5809584
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6730 E Hermosa Vista Drive, Mesa 85215, Vista Villa Townhomes

  • $220,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,329
  • Lot size: 2,876
  • Year built: 1998
  • MLS #: 5857703
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233 S Leandro --, Mesa 85208, Sienna Estates

  • $215,900
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,436
  • Lot size: 2,401
  • Year built: 2012
  • MLS #: 5849414
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10341 E Calypso Avenue, Mesa 85208, Parkwood Ranch Parcel 14

  • $225,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,518
  • Lot size: 5,499
  • Year built: 2000
  • MLS #: 5824137
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8615 E Carol Avenue, Mesa 85208, Wynstone

  • $209,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,087
  • Lot size: 6,020
  • Year built: 1998
  • MLS #: 5837982
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2208 W Lindner Avenue, Mesa 85202, The Landings

  • $179,900
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,531
  • Lot size: 1,590
  • Year built: 1980
  • MLS #: 5811793
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9233 E Neville Avenue, Mesa 85209, Park Central at Augusta Ranch, Augusta ranch,Park central

  • $192,500
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,228
  • Lot size: 557
  • Year built: 2003
  • MLS #: 5853879
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451 S Hawes Road, Mesa 85208, Towne Square AT Desert Village

  • $210,000
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,401
  • Lot size: 2,196
  • Year built: 2007
  • MLS #: 5866333
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1202 E Hearne Way, Gilbert 85234, Heritage Cove AT Wind Drift Lot 1-73 TR A-G

  • $220,000
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,314
  • Lot size: 3,633
  • Year built: 1991
  • MLS #: 5869769
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ARMLS Listing Data last updated 1/19/2019 10:06 AM MST.

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