The National Association of Realtors (NAR) recently released their July edition of the Housing Affordability Index. 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 level based on the most recent price and income data.
NAR looks at the monthly mortgage payment (principal & interest) which is determined by the median sales price and mortgage interest rate at the time. With that information, NAR calculates the income necessary for a family to qualify for that mortgage amount (based on a 25% qualifying ratio for monthly housing expense to gross monthly income and a 20% down payment).
Here is a graph of the income needed to buy a median priced home in the country over the last several years:
And the income requirement has accelerated even more dramatically this year as prices have risen:
Some buyers may be waiting to save up a larger down payment. Others may be waiting for a promotion and more money. Just realize that, while you are waiting, the requirements are also changing.
Follow and Share this blog for current real estate news and views for St Petersburg, Sarasota and Tampa Bay.
Call Christina Stramiello at Lifestyle by Design today for your free real estate consultation. No strings, no pressure, just great information.
Visit wwwLifestyleByDesignRealEstate.com to view available homes directly off the MLS. (Faster and more relevant than third-party sites such as Zillow or Trulia.)
By Christina Stramiello, PA
Broker: Robert Slack Fine Homes, LLC
3320 SW 33rd Rd, #100
Ocala, FL 34474