According to a report released by the National Association of Home Builders/Wells Fargo Housing Opportunity Index, national housing affordability is at its highest level in more than twenty years. 74.6% of existing homes sold in the first quarter of this year were considered “affordable” based upon a national median income of $64,400. The report noted that this was the ninth quarter in a row that the index exceeded 70%.
Markets such as Kokomo, Indiana, reported 98.6% of homes sold were considered affordable based upon a median income of $61,400. Other areas such as Monroe, Michigan, Cumberland, Maryland, and Toledo, Ohio also scored high marks. Conversely, other small communities such as San Louis Obispo and Santa Cruz,CA, Laredo, TX, Ocean City, MD, and Santa Barbara, CA scored on the lower end of the affordability spectrum. You can review a list of market details on the NAHB web site.
With mortgage rates near or below 2011 lows, now may be a good time to look into purchasing real estate. There are plenty of great programs in the market for first time home buyers such as FHA and USDA loans. You can find lots of great information on available mortgage programs using the tools and resources on ForTheBestRate.com.
- 3/1 ARM Mortgages – 30 year mortgage with a low introductory rate which lasts the first 36 months of a loan. After introductory period comes to an end, the rate adjusts up or down based upon a loan’s margin and caps and the current rate of the index which the loan is tied to.
- 5/1 ARM Mortgages – Same idea as with a 3/1 ARM but the intro rate is in place for the first 60 month of the mortgage.
- 7/1 ARM Mortgages – See above…just with 84 month introductory rate.
- 30 year FHA Mortgage – Low money down fixed rate mortgage programs amortized over 30 years.
- 15 year FHA Mortgage – Low money down fixed rate mortgage programs amortized over 15 years.
- 5 Year FHA ARM – Similar in many ways to conventional conforming 5/1 ARMs but with potential for lower down payment.
- Conventional 30, 20, 15, and 10 year fixed rate home loans
Rising Property Taxes: 15% of US counties up in 2012
Kicking the housing market while it’s down? As reported in Fortune Magazine many municipalities are increasing property taxes. 15% of US counties have raised property taxes in 2011, and 10% did so in 2010. This is likely to be tough on homeowners already feeling financial pressure through the recession, and will not make buying a home more appealing, in a time when there are many more properties on the market than potential buyers.
Of course, we can’t overdo the doom and gloom too much. This means that those living in 85% of US counties did not see a tax increase this year. Also, low housing prices and extremely low mortgage rates are sure to act as incentive to buy for many.