Good News for Real Estate
Finally there is some good news for real estate. Contrary to what you hear on the popular media, all isn't as bleak as it initially appears - in fact, there is some downright good news when it comes to housing affordability. Let's take a few minutes to explore the current status of income, mortgage and interest rates to discover the silver lining brought about by the current recession.
Median Family Income
According to the federal government, median family income actually rose in 2008 to just over $62,000; up from $61,335 during 2007. While not a substantial increase, it goes farther than ever when combined with lower interest rates and reduced sales prices.
Interest Rates
By now everyone has become familiar with the up/down volatility of interest rates. Much to everyone's surprise, interest rates have managed to remain at or near historic lows despite the massive print/borrow campaign initiated by the federal government. By the end of 2008, interest rates averaged just 6.15...the fourth lowest annual average since 1973.
Low Price
The median price for an existing single family home has continued to decline from $221,000 in 2006 to just under $175,000 at the end of 2009. Combined with low interest rates, the median family income is still able to purchase more home than ever according to the housing affordability index.
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