The prospect of owning a home has slipped beyond the grasp of the average American wage earner as never before. Home prices may have risen significantly over the past 17 years.
According to a new report from Attom. 35.1% of the average American wage consumes mortgage payments, property insurance, and taxes. It has become unattainable for many Americans due to rising home prices and mortgage rates. However, a recent report reveals that a few counties have seen a relative increase in home affordability in the second quarter of this year. However, Calhoun County, Ala.; Macon County, Ill.; San Francisco County, Calif.; Ontario County, N.Y., outside of Rochester; Mercer County, Pa., north of Pittsburgh; New York County, N.Y., which includes Manhattan; and Calcasieu County, La, about 1.2 percent defied them.
This is why many are hesitant to list their homes — it is a hard time for someone trying to buy a house, especially for young buyers. Ideally, we want to make the housing market affordable, so why not? But perhaps there are reasons why we still need to buy a house. Different stages in life, such as having your own family, getting married, having kids, or starting to get a job, might urge you to buy a home.
Richard Uzelac's TakeAway:
The American Dream is becoming increasingly expensive and difficult to achieve for many families across the United States.
Key points include:
- Cost of living: All 50 states require over $100,000 annual income for a family of four to live comfortably.
- Income gap: Even in the most affordable states, median incomes fall short of the required amount for achieving the American Dream.
As Richard Uzelac read from an article of JP Morgan, “The Housing Affordability Index reveals a complex U.S. real estate market picture. Home prices, mortgage rates, and median family income are key factors influencing affordability.” The article published last 2023 projects a 3.5-year recovery for housing affordability, assuming current trends persist.
This is what it’s based on:
- continued income growth,
- stable mortgage rates, and
- current home prices.
The projection’s sensitivity to mortgage rates is notable; a 1% decrease could shorten the recovery to just 2 years. This forecast applies to the national housing market, but individual metro areas may vary. The restoration of affordability doesn’t necessarily require a home price crash, as robust income growth could gradually improve the Housing Affordability Index. However, regional variations in real estate trends and housing inventory levels may influence local market recoveries differently, affecting potential home buyers across various urban housing markets.
Your Journey to Homeownership: A Step-by-Step Guide
Buying a home is often described as one of life’s most significant investments. It’s an exciting journey, but it can also be complex. This is a quick that will walk you through the key steps to make your path to homeownership smoother and more enjoyable.
1. Assess Your Needs and Finances
Before you start browsing listings, take time to:
– Determine how much house you can afford
– Get pre-approved for a mortgage
– Consider additional costs like closing fees, property taxes, and homeowners insurance
2. Define Your Dream Home
Create a “wish list” for your ideal home, considering factors such as:
– Location and neighborhood
– Home size and layout
– Must-have features
– Potential for growth
3. Partner up with a Real Estate Professional
A skilled realtor can be invaluable in your home-buying journey. They can:
– Access the most up-to-date listings
– Provide insights on local market trends
– Guide you through the entire process
4. Start Your Home Search
With your agent’s help, begin exploring homes that match your criteria. Don’t be discouraged if the perfect home doesn’t appear immediately – patience is key!
5. Make an Offer
When you find “the one,” work with your agent to:
– Determine a fair offer price based on comparable sales
– Craft a competitive offer
– Negotiate terms with the seller
6. Conduct Inspections and Finalize Financing
Once your offer is accepted:
– Schedule a professional home inspection
– Address any issues uncovered during the inspection
– Complete the mortgage approval process
7. Close the Deal and Celebrate!
The final steps involve:
– Reviewing and signing closing documents
– Conducting a final walk-through
– Getting the keys to your new home
