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September 11th, 2020

A Message from The Smith Team! Rent Vs. Own

September 11th, 2020

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Message From The Smith Team

July 31st, 2020

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Message From Scott Smith!

July 24th, 2020

 

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New Weekly Market Stats!

July 22nd, 2020

Message From The Smith Team

July 17th, 2020

 

Click here for some strategies that will get you ahead of the game in the current real estate market!

New Market Stats!

July 14th, 2020

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July 10th, 2020

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Coming Soon in Minneapolis!

July 8th, 2020

 

Clean and neat as a pin! This move-in ready charmer has old world details and modern updates. Hardwood floors on the main level, cove ceilings on the upper level, and wide trim throughout all work well together with the updated kitchen and baths. All three bedrooms on one level! Lower level features a freshly painted family room with brand new carpet. This level also has a three-quarter bath that doubles as a laundry room. The backyard is partially fenced and leads to the two-car detached garage. Furnace and air conditioner are only 1 year old! This fantastic home will not last long!

Taking Advantage of Homebuying Affordability in Today’s Market

July 7th, 2020

Taking Advantage of Homebuying Affordability in Today’s Market | MyKCM

Everyone is ready to buy a home at a different time in their lives, and a health crisis or not, today is no exception. Understanding how affordability works and the main market factors that impact it may help those who are ready to buy a home narrow down their optimal window of time to make a purchase.

There are three main factors that go into determining how affordable homes are for buyers:

  1. Mortgage Rates
  2. Mortgage Payments as a Percentage of Income
  3. Home Prices

The National Association of Realtors (NAR), produces a Housing Affordability Index, which takes these three factors into account and determines an overall affordability score for housing. According to NAR, the index:

“…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.”

Their methodology states:

“To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.”

So, the higher the index, the more affordable it is to purchase a home. Here’s a graph of the index going back to 1990:Taking Advantage of Homebuying Affordability in Today’s Market | MyKCMThe green bar represents today’s affordability. We can see that homes are more affordable now than they have been at any point since the housing crash when distressed properties (foreclosures and short sales) dominated the market. Those properties were sold at large discounts not seen before in the housing market.

Why are homes so affordable today?

Although there are three factors that drive the overall equation, the one that’s playing the largest part in today’s homebuying affordability is historically low mortgage rates. Based on this primary factor, we can see that it is more affordable to buy a home today than at any time in the last seven years.

If you’re considering purchasing your first home or moving up to the one you’ve always hoped for, it’s important to understand how affordability plays into the overall cost of your home. With that in mind, buying while mortgage rates are as low as they are now may save you quite a bit of money over the life of your home loan.

Bottom Line

If you feel ready to buy, purchasing a home this season may save you significantly over time based on historic affordability trends. Let’s connect today to determine if now is the right time for you to make your move.