The affordability of housing has been a topic of conversation and concern for many years. While it does cost more to purchase a home in 2020, now is actually a great time to buy based on affordability numbers.
What is the housing affordability index?
The National Association of Realtors (NAR) produces a monthly Housing Affordability Index based on various data. The goal of the index is to determine if a typical family earns enough to qualify for a mortgage at both the national and regional level. They base affordability on recent home prices and income information.
The higher the index, the more affordable it is for a median household to purchase a median home. After the crash in 2017, the market had a large number of distressed properties available. The index is lower today than during that time period simply because of the amount of properties being sold at a huge discount.
However, today’s index is also higher than any period of time from 1990 to 2008.
What does a high index mean for today’s buyer?
As wages have increased and mortgage rates remain at historic lows, it is more affordable to purchase a home this year than it was this time last year.
For home buyers looking to relocate to the state, Utah housing is incredibly affordable. Despite the pandemic, Utah’s unemployment rate is still one of the lowest in the country. Real estate is booming and local residents are taking advantage of low interest rates and a hot market.
Utah has also seen a shift in people relocating to the state. With all of the wonderful outdoor amenities Utah has to offer, families looking for quieter suburban homes and easy access to the mountains have moved from Texas, California, New York, and even Florida.
The Bottom Line
While 2020 will go down in the history books for various reasons, despite a global pandemic it is a fantastic time to buy a home. Homes are affordable and the market is booming and mortgage rates remain low. Purchasing a home right now is a great move.
If you are ready to make a move, give us a call! We are happy to answer any questions you may have about the market and purchasing a home.