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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5135 E Evergreen Street, Mesa 85205, Northpointe 1 Lot 1153-1268 1269-1272

  • $189,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,116
  • Lot size: 1,818
  • Year built: 1985
  • MLS #: 5809812
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1500 N Sun View Parkway, Gilbert 85234, Sun View Patio Homes Lot 1-93 & Lot A-M

  • $189,777
  • Bedrooms: 3, Baths: 2
  • Home size: 1,054
  • Lot size: 2,317
  • Year built: 1984
  • MLS #: 5825814
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444 N 111th Way, Mesa 85207, Grandview Manor

  • $218,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,404
  • Lot size: 7,275
  • Year built: 1980
  • MLS #: 5823146
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9243 E Carmel Avenue, Mesa 85208, Wynstone

  • $210,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,191
  • Lot size: 5,506
  • Year built: 1997
  • MLS #: 5825956
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2024 S Baldwin --, Mesa 85209, Tivoli at Augusta Ranch

  • $210,000
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,386
  • Lot size: 1,386
  • Year built: 2004
  • MLS #: 5825803
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708 S Kachina --, Mesa 85204, Kachina Parkway 3

  • $219,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,503
  • Lot size: 7,950
  • Year built: 1961
  • MLS #: 5826038
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6610 E University Drive, Mesa 85205, Silverstone Replat

  • $210,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,210
  • Lot size: 3,116
  • Year built: 2004
  • MLS #: 5797789
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126 N Ramada --, Mesa 85205, Apache Cove

  • $225,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,383
  • Lot size: 4,200
  • Year built: 2004
  • MLS #: 5820336
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125 N 22nd Place, Mesa 85213, Cottage Grove Estates Amd

  • $220,000
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,396
  • Lot size: 3,128
  • Year built: 2000
  • MLS #: 5824941
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6721 E Boston Street, Mesa 85205, Desertaire Estates

  • $219,900
  • Bedrooms: 3, Baths: 3
  • Home size: 1,764
  • Lot size: 9,156
  • Year built: 1970
  • MLS #: 5818192
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1298 S Owl Drive, Gilbert 85296, Gardens Parcel 5 Condominium Amd

  • $225,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,464
  • Lot size: 781
  • Year built: 2005
  • MLS #: 5816888
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7006 E Jensen Street, Mesa 85207, Moondance Townhomes Lot 1-177 TR A-K

  • $215,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,423
  • Lot size: 3,608
  • Year built: 1989
  • MLS #: 5820535
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537 S St Claire --, Mesa 85208, Signal Butte Manor

  • $210,000
  • Bedrooms: 4, Baths: 2.5
  • Home size: 1,537
  • Lot size: 7,499
  • Year built: 1999
  • MLS #: 5818614
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418 N 101st Place, Mesa 85207, Sagewood

  • $205,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,140
  • Lot size: 9,496
  • Year built: 1999
  • MLS #: 5815471
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539 S 91st Place, Mesa 85208, Apache Trails

  • $219,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,320
  • Lot size: 8,638
  • Year built: 1960
  • MLS #: 5804765
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ARMLS Listing Data last updated 10/15/2018 10:38 AM MST.

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