Mission Viejo Housing Affordability Heats Current Market

By
Real Estate Agent with The Associates Realty Group CA-01880463

Every now and again Forbes magazine assembles what it calls its “top financial brain

power” to comment on a topic of interest. Late last week, the topic was real estate—more

specifically, the answer to the question, “Is the Real Estate Market Still Healthy?” Speaking for

our Mission Viejo real estate market, I’d have to the answer “yes.”(It’s a cinch I’ll never be asked

by Forbes to join the panel because a one-word answer doesn’t make for a very long article).

Their panelists did better at elaborating. They voiced a couple of blanket observations on

homeownership in today’s market, then settled on some reassuring points on housing affordability.

Their observations are aimed at the nation as a whole, but the conclusions are apt for Mission

Viejo buyers and sellers, too:

Point One: The inventory of existing homes for sale continues to be tight just about

everywhere. It’s been trending that way for quite a while—and it results in the average days on

market continuing to be shorter than usual. Ultimately, that should cause new housing construction

to accelerate.

Point Two: The average age of homeowners is gradually increasing. Younger first-time

buyers—who have spent their entire working lives during The Great Recession and its aftermath

—have been having a harder time gathering the wherewithal to buy their first home. If the latest

optimistic projections about the economy prove accurate, those demographics should reverse.

Point Three: Rising interest rates have not had much of an impact on the residential market

because the overall level of rates “is low enough right now...The fact is that housing is

affordable.” Mission Viejo buyers should be reassured by one investment officer (he oversees

$200 billion) who says that housing “still will be affordable even if rates go up another 50 basis

points.”

Point Four: In a related point, fixed mortgages are growing in popularity. As we head into

real estate’s peak season, that “speaks to housing affordability” because it reflects buyers’

satisfaction with today’s rates: they don’t have to stretch the family budget to handle the resulting

monthly payments.

Mission Viejo buyers and sellers benefit when the Housing Affordability Index—the

measure that tracks payment amount as a percentage of income—indicates that typical families can

qualify for a mortgage loan on a typical home. That has much to do with the real estate market

health the analysts were pointing to...and a sign that now is a good time to give me a call!

 

Oren Golanski
Realtor BRE # 01880463, The Associates Realty Group
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