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    Homes are More Affordable in 44 out of 50 States

    With both home prices and mortgage rates increasing this year, many are concerned about a family’s ability to purchase a major part of the American Dream – its own home. However, if we compare housing affordability today to the average affordability prior to the housing boom and bust, we are in much better shape than most believe.

    In Black Knight’s latest monthly Mortgage Monitor, they revealed that in the vast majority of the country, it is actually moreaffordable to purchase a home today than it was between 1995 to 2003 when looking at mortgage payments (determined by price and interest rate) as compared to incomes. Home prices are up compared to 1995-2003, but mortgage rates are still much lower now than at that time. Today, they stand at about 4.5%. Here are the average mortgage rates for each of the years mentioned:

    • 1995 – 7.93%
    • 1996 – 7.81%
    • 1997 – 7.6%
    • 1998 – 6.94%
    • 1999 – 7.44%
    • 2000 – 8.05%
    • 2001 – 6.97%
    • 2002 – 6.54%
    • 2003 – 5.83%

    On the other hand, wages have risen over the last twenty years.

    Black Knight’s research revealed that, when comparing “the share of median income required to buy the median-priced home” today, to the average between 1995 to 2003, it is currently more affordable to purchase a home in 44 of 50 states.

    Here is a state map of the percentage change in the price-to-payment ratio. Positive numbers indicate that it is less affordable to buy while negative numbers indicate that it is more affordable.

    Homes are More Affordable in 44 out of 50 States | MyKCM

    Bottom Line

    Whether you are moving up to the home of your dreams or purchasing your first house, it is a great time to buy when looking at historic affordability data.

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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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