Buying a home can be a life-changing decision and is one that people take seriously, especially in this market. Part of becoming a responsible homeowner is weighing every aspect of the decision before buying, including lifestyle preferences, job and financial situation and affordability. Fortunately, for anyone who’s considering buying a home right now, current housing affordability conditions can benefit today’s buyers for years to come.
“The housing affordability index in Orlando is currently 270.30 percent,” said Orlando Regional Realtor Association Board Chairwoman Kathleen Gallagher McIver, of RE/MAX Town & Country Realty, “which means that median-income earners make 170 percent more income than is necessary to qualify for median-priced homes.
“Buyers who earn the reported median income of $53,219 can qualify to purchase one of the 9,932 homes in Orange and Seminole counties currently listed in the local multiple listing service for $270,031 or less.”
And, the rock-bottom mortgage rates we’re seeing are contributing significantly to housing affordability. Rates for a 30-year fixed-rate mortgage hover around 4.4 percent.
Today’s affordability conditions are saving buyers thousands of dollars a year. Consider a buyer who purchased a median-priced home five years ago with an FHA mortgage. With the required 3 percent down payment for an FHA mortgage, their monthly payment would have been $1,650. Today, with the current interest rate and median prices, that buyer would pay a monthly mortgage of $1,150. That equals a $500 savings per month or a $6,000 savings per year.
The savings today’s buyers are receiving are not a one-time benefit. Buyers with fixed-rate mortgages will save money every year that they are living in their home. This is truly an example of how homeownership builds wealth over the long term.
“Today’s housing affordability is really helping people who are ready to invest in their future through homeownership,” McIver said. “Buyers who have reviewed their finances and believe they are in a secure position to become homeowners have an opportunity to take advantage of affordability conditions in today’s market and enjoy the social and financial benefits of homeownership for years to come.”
—Courtesy of the ORRA