Somebody sent me this article this morning asking me if buying a home is REALLY as impossible as the headlines make it sound. In short, no...but allow me to elaborate a bit.
This article compares today's housing market to what previous generations faced. While there are some very real affordability challenges, we are missing a pretty important part of the conversation.
Yes, homes are expensive. Yes, interest rates are higher than what we became accustomed to a few years ago. Yes, home prices have outpaced household income growth. BUT...let's put a few things in perspective.
In 1984, the median household income was around $22,400, mortgage rates were nearly 14%, and the median new home sold for about $80,000. Homes were also considerably smaller and generally had fewer amenities than what we've come to expect today.
Fast forward to today, and homes are larger, prices are significantly higher relative to household income, and affordability is a legitimate concern.
What bothers me about conversations around affordability and the comparison to prior generations is that we are spending SO much time telling people why they CAN'T buy a home that we are not spending nearly enough time helping them figure out how they CAN.
For starters, you don't necessarily need 20% down to buy a house. Many buyers qualify for loans requiring as little as 3-3.5% down, and there are even more aggressive programs worth exploring.
Furthermore, I'd like to share what is actually happening in the market right now.
We are negotiating purchase prices below appraised values, significant seller concessions, inspection repairs, and interest rate buydowns for our buyers. These are opportunities that were MUCH harder to come by a few years ago...I'm talking damn near impossible.
That doesn't mean everyone should rush out and buy a house right now. If the numbers don't work, they simply don't work. However, don't sit on the sidelines waiting for the headlines to tell you it's a good time because if you do, I guarantee you'll miss some pretty incredible opportunities.
Another thing you should consider is if interest rates drop and more buyers return to the market, some of today's negotiating leverage will likely disappear. It's not a guarantee, but it's certainly worth considering. The goal shouldn't be to time the perfect market. The goal should be to understand the market we are IN and determine how to make it work for YOU.
Maybe buying a home makes sense right now. Maybe waiting is a better move for you. Either way, that decision deserves more than a scary headline and a comparison to what your grandparents paid for their house 40 some years ago.
Get the facts, understand your options, run the numbers, and partner with professionals who will take the time to sit down with you, assess all your options, and support whatever path you decide is best for you.
For crying out loud, do not let the headlines make your financial decisions for you...ever!!
If you are curious about what buying or selling in today's market could actually look like for you, Brad and I would love to have that conversation and help you explore your options.
