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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124 E 8th Drive, Mesa 85210, Western Homesites Add 2

  • $224,900
  • Bedrooms: 4, Baths: 2
  • Home size: 1,500
  • Lot size: 6,817
  • Year built: 1959
  • MLS #: 5804129
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11501 E Elton Avenue, Mesa 85208, Desert Village

  • $222,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,463
  • Lot size: 9,113
  • Year built: 1955
  • MLS #: 5804179
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4136 E Camino Street, Mesa 85205, Greenfield Park Unit 2 Lot 236-400 TR A

  • $189,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,136
  • Lot size: 4,534
  • Year built: 1986
  • MLS #: 5817461
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5242 E Covina Road, Mesa 85205, Dreamland Villa 6

  • $205,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,870
  • Lot size: 8,000
  • Year built: 1963
  • MLS #: 5778098
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846 S Nevada Way, Mesa 85204, Park Village Estates

  • $218,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,150
  • Lot size: 6,852
  • Year built: 1970
  • MLS #: 5824381
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7726 E Baseline Road, Mesa 85209, Villa Rialto Condominium Amd

  • $212,500
  • Bedrooms: 3, Baths: 2
  • Home size: 1,535
  • Lot size: 1,316
  • Year built: 2017
  • MLS #: 5797647
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4272 E Jasper Drive, Gilbert 85296, Gardens Parcel 5 Condominium Amd

  • $220,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,464
  • Lot size: 791
  • Year built: 2004
  • MLS #: 5829846
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9913 E Empress Avenue, Mesa 85208, La Fortina

  • $210,000
  • Bedrooms: 3, Baths: 2
  • Home size: 991
  • Lot size: 2,500
  • Year built: 2006
  • MLS #: 5809099
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1164 S Boulder Street, Gilbert 85296, Western Skies

  • $214,999
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,469
  • Lot size: 2,452
  • Year built: 1999
  • MLS #: 5826026
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9547 E Dallas Street, Mesa 85207, Desert Saguaro Estates

  • $219,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,356
  • Lot size: 8,207
  • Year built: 1978
  • MLS #: 5830180
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8860 E Oro Avenue, Mesa 85212, Arizona Skyline

  • $225,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,357
  • Lot size: 4,251
  • Year built: 2002
  • MLS #: 5814542
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640 E 1st Place, Mesa 85203, Mesa Villa Sub Plat 1

  • $225,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,238
  • Lot size: 8,233
  • Year built: 1944
  • MLS #: 5801033
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9233 E Neville Avenue, Mesa 85209, Park Central AT Augusta Ranch Condominium 2ND Amd

  • $195,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,228
  • Lot size: 557
  • Year built: 2003
  • MLS #: 5822548
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225 N Standage Place, Mesa 85201, Mesa Madrid Townhouses

  • $174,900
  • Bedrooms: 4, Baths: 2.5
  • Home size: 1,656
  • Lot size: 1,738
  • Year built: 1967
  • MLS #: 5755409
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225 N Standage --, Mesa 85201, Mesa Madrid Townhouses

  • $169,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,212
  • Lot size: 1,751
  • Year built: 1969
  • MLS #: 5829054
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ARMLS Listing Data last updated 10/15/2018 9:38 AM MST.

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