Affordability is not a significant issue when buying a house.
Supply of houses for sale has barely kept pace with demand, and inventory of new or existing houses for sale shrunk down to only a four-month supply ading to price pressures. Also, adding to price pressure is home mortgage interest rate, which remain close to 4%.
Although prices are going up and inventory is scarce, because of low interest rates and an increasing job market and increasing wages, house buying affordability is nowhere near challenging times.
The percentage of income needed to afford a median rent historically was 25.8%. Right now, we’re over 29%, much higher than historic numbers. But if we look at buying a house, the percentage of income needed to purchase a median-price house historically is about 21%. Today, we’re still lower at 15.8%, well below historic numbers. The percentage of income that a family needs to buy a house is less than historical numbers.
Part of the reason for is that the 30-year fixed interest rate from Freddie Mac is lower causing more and more home renters, who are seeing their rent increase, to go ahead and buy their first house and spend less than they would on rent. Today, we’re seeing more and more renters turning into home shoppers.
TransUnion reported that the share of renters buying a home has gone up from 45% in the first quarter of 2015 to 50% in the first quarter of 2016, and up to 55% in the first quarter of 2017.
Rents increasing, home mortgage availability getting easier, and interest rates staying low, are reasons for renters to buy a house. If you are a prospective home buyer who is ready and willing to act now, but are not sure if you are able to or woule like to know more about available homes for sale in Woodland Hills, West Hills, Chatsworth, Canoga Park, Tarzana, Encino, Lake Balboa, Van Nuys, North Hills or any other San Fernando Valley or Santa Clarita Valley real estate, please contact the real estate professional agents at HelpUSell Real Estate, Southland Realty, today at (818) 997-1000.
Buying a house? Search houses for sale here, we have complete Multiple Listing Service (MLS) of residential houses for sale in Lake Balboa, Van Nuys, Reseda, Woodland Hills, Chatsworth, Canoga Park, Warner Center, Tarzana, Encino, or any other Los Angeles, San Fernando Valley and Santa Clarita Valley area real estate.