Is Housing Still Affordable?

Key Factors That Impact Affordability Today

Key Factors That Impact Affordability Today | MyKCM

You can’t read an article about residential real estate without the author mentioning the affordability challenges that today’s buyers face. There’s no doubt homes are less affordable today than they were over the last two years, but that doesn’t mean homes are now unaffordable.

There are three measures used to establish home affordability: home prices, mortgage rates, and wages. Let’s look closely at each of these components.

1. Home Prices

The most recent Home Price Insights report by CoreLogic shows home values have increased by 19.1% from last January to this January. That was one reason affordability declined over the past year.

2. Mortgage Rates

While the current global uncertainty makes it difficult to project mortgage rates, we do know current rates are almost one full percentage point higher than they were last year. According to Freddie Mac, the average monthly rate for last February was 2.81%. This February it was 3.76%. That increase in the mortgage rate also contributes to homes being less affordable than they were last year.

3. Wages

The one big, positive component in the affordability equation is an increase in American wages. In a recent article by RealtyTrac, Peter Miller addresses that point:

“Prices are up, but what about wages? ADP reports that job holder incomes increased 5.9% last year but rose 8.0% for those who switched employers. In effect, some of the higher cost to buy a home has been offset by more cash income.”

The National Association of Realtors (NAR) also recently released information that looks at income and affordability. The NAR data provides a comparison of the current median family income versus the qualifying income for a median-priced home in each region of the country. Here’s a graph of their findings:

Key Factors That Impact Affordability Today | MyKCM

As the graph shows, the median family income (shown in blue on the graph) is greater than the qualifying income needed to buy a median-priced home (shown in green on the graph) in all four regions of the country. While those figures may vary in certain locations within each region, it’s important to note that, in most of the country, homes are still affordable.

So, when you think about affordability, remember that the picture includes more than just home prices and mortgage rates. When prices rise and rates rise, it does impact affordability, and experts project both of those things will climb in the months ahead. That’s why it’s less affordable to buy a home than it was over the past two years when prices and rates were lower than they are today. But wages need to be factored into affordability as well. Because wages have been rising, they’re a big reason that, while less affordable, homes are not unaffordable today.

Bottom Line

To find out more about affordability in our local area, let’s discuss where home prices are locally, what’s happening with mortgage rates, and get you in contact with a lender so you can make an informed financial decision. Remember, while less affordable, homes are not unaffordable, which still gives you an opportunity to buy today.

Swan Lake Estates: A Hidden Gem in Gulfport, MS

Swan Lake front

Swan Lake Estates is a covenant protected neighborhood with an HOA that strives to keep this neighborhood a crown jewel of neighborhoods on the MS Gulf Coast. Located in the northeast section of Gulfport,  it is convenient to just about anywhere you want to be on the coast. Heading west out of the neighborhood you will reach Highway 49 within 5 minutes. Hwy 49 takes you to downtown Gulfport, Saucier, or Wiggins all within 20 or 30 minutes. If you go east out of Swan Lake, a couple of turns and you will be at Hwy 605. Hwy 605 leads you to the interstate which will take you to Biloxi or Ocean Springs within half an hour. If you are up for a little longer drive you can be in New Orleans, LA or Mobile, AL under an hour and a half. It reaSwan Lake sunsetlly is centrally located and convenient to so many adventures here on the MS Gulf Coast, but …. on those days you just don’t want to get in the car, you want to enjoy time at home with your family and slow down a bit, Swan Lake offers it’s own adventure. Fire up the smoker or grill, enjoy a nice meal and then head over to the pool for a swim, bring the kayaks and go out on the lake. Make sure to bring the fishing poles along and catch some fish while you are out on the lake or cast a line out on the pier. Little ones just want to play? Take them over to the shaded playground and nature trail located just across from the lake and pool. End  your Swan Lake adventure by watching the gorgeous sunsets over the lake, like the one pictured above.

Swan Lake Estates really has it all: location, amenities, neighborhood social events, unique homes, large yards and great neighbors all coupled with affordable prices, insurance, taxes and HOA fees. All this makes it one of the best neighborhoods to buy a home  and settle down here on the MS Gulf Coast. You get a lot of bang for your buck!

Fishing on Swan Lake
Fishing on Swan Lake

If you would like to take a private tour of Swan Lake Estates and all the available homes to purchase there, give Morgan or Kristy Young a call at 228.239.0371 or 228.697.1575. Office # is 228.215.2545. Morgan and Kristy are your local experts, they have sold multiple homes with happy clients in Swan Lake. Morgan and Kristy know the ins and outs of this neighborhood and the surrounding areas. Watch this video and have a a bird’s eye view of Swan Lake Estates.

We hope we can help you find your Next Home whether it be in Swan Lake or one of the other great neighborhoods or areas the MS Gulf Coast has to offer! Check out the current available homes in Swan Lake Estates and similar neighborhoods by using this link: Swan Lake Estates homes for sale and more.

The MS Gulf Coast is growing and has so many hidden gems just like Swan Lake Estates, including awesome restaurants, entertainment, shopping and so much more. Take the time to slow down and discover “The Secret Coast”. Check out some of the offerings of our “Secret Coast” here: Coastal MS : The Secret Coast . Here are a couple of our favorite spots to eat:

We hope you find your place here on the MS Gulf Coast and we would be honored to help you find it!

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