2 Trends Helping Keep Housing Affordable

    Two positive trends have started to emerge that impact the 2019 Spring Housing Market. Mortgage interest rates for a 30-year fixed rate loan have dropped to new lows, right as reports show that wages have increased at their highest rate in decades!

    These two factors have helped keep housing affordable despite low supply of houses for sale driving up prices. First American’s Chief Economist, Mark Fleming, explains the impact,

    “Ongoing supply shortages remain the main driver of the performance gap as the housing market continues to face an inventory impasse – you can’t buy what’s not for sale.

     However, an unexpected affordability surge, driven primarily by lower-than-anticipated mortgage rates, rising wages and favorable demographics, has boosted housing demand.”

    Mortgage interest rates had been on the rise for most of 2018 before reaching their peak in November at 4.94%. According to Freddie Mac’s Primary Mortgage Market Survey, interest rates last week came in at 4.20%.

    Average hourly earnings grew at an annual rate of 3.2% in March, up substantially from the 2.3% average pace seen over the last 10 years.

    These two factors contributed nearly $6,000 worth of additional house-buying power for median households from February to March 2019, according to First American’s research. Fleming is positive about the prolonged impact of lower rates and higher wages.

    “We expect rising wages and lower mortgage rates to continue through the spring, boosting housing demand and spurring home sales.”

    Bottom Line

    Low mortgage interest rates have kept housing affordable throughout the country. If you plan on purchasing a home this year, act now while rates are still low!

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    Danny Cheung

    I spent over twenty five (25) years with the Department of Defense in the hardware/software design and development as well as program management prior to joining the Group in a full time capacity. I am thrilled to put my years of experience as an Electronics Engineer to assist and lead our Real Estate Group to the next level. I am committed to establishing the tools and resources necessary for our team members to work more seamlessly and effectively thus ensuring our clients full satisfaction. My wife and I have two daughters and a dog (he's more like our son). I enjoy travelling and watching sports especially football…Go Skins!

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