More affordable homes than last year
Affordability is always a top concern for buyers. After all, when you’re thinking about buying a home, there are few considerations more important than whether or not you can afford it.
So how has the coronavirus affected affordability and what does it mean for prospective buyers?
Well, according to a new analysis from the National Association of Realtors, the numbers look good for home shoppers.
In fact, homes listed for sale during the first quarter of 2020 were 8 percent more affordable compared to the same period in 2019.
Danielle Hale, chief economist for the group’s consumer website, says the COVID pandemic has lowered mortgage rates and allowed buyers to get a better deal.
“The lack of affordable homes for sale has been the No. 1 issue facing home buyers for the last several years,” Hale said. “The COVID pandemic has eased the affordability side of the equation by lowering interest rates, but it has also prompted many sellers to delay listing their homes. As buyers return, we’ll need to see sellers come back for the housing market to normalize.”
That’s true. For example, the report shows that out of every 1,000 households just eight were listed for sale.
That’s a considerable drop from the long-term average which is 17 listings per 1,000 households.
Affordable Home Markets – Q1 2020
|Metro||Active Listings*||Number of Households*||Listings Per Households**||Current Listings vs. Long Term Average**||Median Listing Price (April)||Affordability Score (April)|
|Des Moines-West, Iowa||3,026||277,780||10.9||0.63||$269,800||1.03|
|Baton Rouge, LA||3.782||323,455||11.7||0.68||$248,800||1.00|
|Lakeland-Winter Haven, FL||2,991||269,066||11.1||0.64||$235,050||0.87|
*As of May 2
**Per 1,000 households
Do you find home prices in your area to be affordable? For Las Vegas area, we rank 80 on affordability score according to Realtor.com’s data.
Will there be more affordable homes to come?
In short, to truly know whether home prices will drop in the coming months ahead or not remains to be seen due to current market data giving us mixed signals.
Number of active listings have gone down during the first quarter of 2020 but it’s showing signs of improvements by end of April 2020 year over year.
Check out our recent post: Number of new listings show improvements
Adding to mixed signals, buyers are fueled by historically low interest rates in search of a good deal on their home shopping. This has caused the home values to keep pretty steady throughout the pandemic.
As always, interest rate plays a key role here. If buyers find that interest rates are too high, demand will fade. Which means low inventory or not values are not going up.
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