Interest Rates Down, Home Prices Up – What gives?

By
Real Estate Agent with CO-RE Group, LLC -Real estate sales and services ER100036445

 

Buy a house now in Colorado SpringsThe latest Housing Affordability Index from the National Association of REALTORS® shows an interesting trend taking place this year that needs buyers’ attention. Most people know that the mortgage rates are still at incredibly low rates but don’t feel there is much sense of urgency.

This report shows that mortgage rates have fallen from 4.37% in January to 3.81% for June. However, the report shows that the payment as a percentage of income has gone from 12.1% to 13.9% which simply means that buyers have to spend more of their income on a home.

The reason is that the median price of homes nationally has gone from $154,600 in January to $190,100 in June which is a 23% increase. The two major components of housing affordability are the price of the homes and the mortgage rates a buyer must pay.

Another influence in the market place is the supply factor. With rising rental rates, homeowners decide and can afford to rent their home instead of selling. It’s a nice alternative for plenty of homeowners. However, less inventory means increasing prices as the same amount of buyers are pushing into the market.

Even if one of those components is going down, the other could have a significant affect as is shown in this year’s trend in housing affordability. In the past few weeks, the effects of which are not show in this report, mortgage rates have been slowly but steadily moving up.

Home buyers and investors who have been taking a wait and see approach need to make a decision if now is the time to act.

 

Originally Posted Here: http://www.yourcoloradospringshouse.com/interest-rates-down-home-prices-up-what-gives/

Are you looking to buy a home? Are you just curious to see what’s available in your preferred area? Simply sign up and receive listing alerts tailored to your search criteria!

Get Free Listing Alerts!
Posted by

If you like this blog post, re-blog, like it, tweet it or google+ it.

 Colorado Real Estate Sales and Services

CO-RE Group, LLC

Real Estate Sales and Services

call or text: 719-321-0800

Follow Me on Pinterest

We are here for you, when life gets you moving!

 Colorado Springs Life | Promote Your Page Too

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
ActiveRain Community
Groups:
Realtors®
Bananatude
Tags:
interest rates
home prices
buy
sell
mortgage

Spam prevention
Show All Comments
Rainmaker
1,267,934
Alan Kirkpatrick
Austin Texas Homes - Round Rock, TX
Alan in Austin

Susanna:

Nice post and good info. Hope you have a great week. 

Sep 12, 2012 12:10 AM #1
Ambassador
2,602,765
Ed Silva
RE/MAX Professionals, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

Susanna, there are a lot of opportunities with homes for buyers and the low interest rates help as well. Good Post

Sep 12, 2012 11:53 AM #2
Rainmaker
1,607,805
Charles Stallions Real Estate Services
Charles Stallions Real Estate Services Inc - Gulf Breeze, FL
Buyers Agent 800-309-3414 Pace and Gulf Breeze,Fl.

So what gives, IMHO interest rates are to low and people expect them to go lower, it is too hard to get a loan and this administration has not even thought of housing as a vehicle to help the economy.

Sep 20, 2012 01:02 PM #3
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainer
189,450

Susanna Haynie

Colorado Springs Realtor GRI CNE MCNE ePro MRP
Ask me a question
*
*
*
*

Additional Information