Trying to get the message out there to buyers and seller, I thought this is newsworthy or blogworthy!!
The Real Estate marketplace maybe one of the best in decades. Opportunities are out there for buyers and sellers who are looking to move up.
According to Jeff Detwiler, President and CEO at Long & Foster, Realtor, Inc. who has been traveling to many of our offices and sharing this important information. I thought I should pass on his information. This positive signs are there, but like so many of my clients, FEAR gets in the way. By the time the general public begins believing what we have been telling them, they have missed the market. Our inventory is at an all time LOW here in Loudoun County. Demand is UP. When demand outweighs supply, prices go up.
Please take into consideration these facts cited by Mr. Detwiler in his most recent email to us:
The NAR Housing Affordability Index - What is It?
Essentially, the index is a measure of the financial ability of U.S. families to buy a house.
In the simplest terms, an index value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home.
An index above 100 signifies that a family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.
The NAR Housing Affordability Index - Trending Higher
The current index at the end of 2009 stood at 171.6 and you can see below that is 56 points above where it was at the end of 2007!
What this shows is that the relationship between home prices, mortgage interest rates and family income is very favorable right now.
The NAR has said that it is the most favorable since tracking began in 1970!
The Impact of Mortgage Rates
While pricing is obviously important, mortgage rates drive a significant piece of the affordability puzzle. The chart below shows the context of today's low rates - It really tells a story and spells out the opportunity presented in the current market.
It's important to keep in mind that for every increase of 100 basis points (or 1% in rate); the monthly payment goes up about $63 per month for each $100,000 borrowed. Over the life of a 30-year loan, that can add up quickly - to $22,680 for each $100k borrowed.
Eco Boomers and Houshold growth according to the Joint Center for Housing at Harvard University is expected to increase more than 1.25 annually over the next decade. Humans need shelter, the real estate industry is built to last!
Call me, I am ready to help you buy or sell your home, This Spot's For You!
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