47% of New Buyers Surprised by How Affordable Homes Are Today

<article class="post-1990 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-1990"><span class="entry-date">February 11, 2021</span><div class="entry-header center-block text-center"><h1 class="entry-title">47% of New Buyers Surprised by How Affordable Homes Are Today</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=47%25+of+New+Buyers+Surprised+by+How+Affordable+Homes+Are+Today&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2F47-of-new-buyers-surprised-by-how-affordable-homes-are-today%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
<div class="fb-share-button display-inline-block" data-href="https://gilliggroup.com/blog/47-of-new-buyers-surprised-by-how-affordable-homes-are-today/" data-layout="" data-size=""><a class="facebook solid fb-xfbml-parse-ignore" data-tracking="Post,Social Post Link Clicked,Twitter" href="https://www.facebook.com/sharer/sharer.php?u=https%3A%2F%2Fgilliggroup.com%2Fblog%2F47-of-new-buyers-surprised-by-how-affordable-homes-are-today%2F&amp;src=sdkpreparse" target="_blank"><span class="force-hidden">Facebook</span></a></div>
<a class="pinterest solid display-inline-block" count-layout="horizontal" href="https://pinterest.com/pin/create/link/?url=https%3A%2F%2Fgilliggroup.com%2Fblog%2F47-of-new-buyers-surprised-by-how-affordable-homes-are-today%2F&amp;description=47%25+of+New+Buyers+Surprised+by+How+Affordable+Homes+Are+Today" target="_blank"><span class="force-hidden">Pinterest</span></a>
<a class="linkedin solid display-inline-block" href="https://www.linkedin.com/shareArticle?mini=true&amp;url=https://gilliggroup.com/blog/47-of-new-buyers-surprised-by-how-affordable-homes-are-today/?shareSlug%3D47-of-new-buyers-surprised-by-how-affordable-homes-are-today" target="_blank"><span class="force-hidden">LinkedIn</span></a>
<a class="email dashicons dashicons-email solid display-inline-block" href="mailto:?subject=From gilliggroup.com: 47% of New Buyers Surprised by How Affordable Homes Are Today&amp;body=47% of New Buyers Surprised by How Affordable Homes Are Today%0D%0Dhttps://gilliggroup.com/blog/47-of-new-buyers-surprised-by-how-affordable-homes-are-today/" target="_blank"><span class="force-hidden">Email</span></a>
</div></div><div class="post-tax post-category"><span></span><a href="../category/realtor-blog/index.html" rel="tag">Realtor Blog</a></div><div class="post-tax post-post_tag"></div></div><div class="entry-content"><div>
<p><img alt="47% of New Buyers Surprised by How Affordable Homes Are Today | Simplifying The Market" class="webfeedsFeaturedVisual wp-post-image" decoding="async" link_thumbnail="" loading="lazy" sizes="auto, (max-width: 549px) 100vw, 549px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/02/10130507/20210211-KCM-Share-549×300.jpg" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/02/10130507/20210211-KCM-Share-549×300.jpg 549w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/02/10130507/20210211-KCM-Share.jpg 750w" style="display: block; margin-bottom: 5px; clear:both;max-width: 100%;" width="358"/></p>
<p>Headlines matter. Right now, it’s hard to read about real estate without seeing a headline that suggests homes have become unaffordable for most Americans. In reality, there’s hard evidence that shows how owning a home is more affordable than <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-data-solutions-2021-rental-affordability-report/">renting</a> in most parts of the country, as record-low interest rates are keeping monthly mortgage payments about 23% <a href="https://www.corelogic.com/blog/2020/12/affordability-challenges-ahead-large-demographic-tailwind-has-arrived-amid-lowest-inventory-of-homes-for-sale.aspx">lower</a> than the typical payment of 20 years ago. Despite the facts, misleading headlines persist, and they impact how hopeful homebuyers perceive the market.<span id="more-43850"></span></p>
<p>In a recent <a href="https://news.move.com/2021-02-03-Affordability-Surprises-First-Time-Homebuyers-While-Parental-Assistance-Savings-and-Wishlist-Compromises-Prove-Common-Survey-Finds">survey</a> by <em>realtor.com</em>, home shoppers indicated they were surprised by what they could actually afford when buying their first home. In fact, 47% discovered their budget was larger than they expected. George Ratiu, <em>Senior Economist</em> at <em>realtor.com</em>, explains:</p>
<blockquote>
<p><em>“For first-time buyers, especially, the drop in the 30-year mortgage rate…has provided unexpected leverage. Lower rates allowed many buyers to stretch and buy more expensive homes while keeping their monthly budget the same.”</em></p>
</blockquote>
<h4><strong>So why do these negative headlines that cast doubt on affordability continue to exist?</strong></h4>
<p>Most analysts only look at two of the three elements that make up the affordability equation: <strong>price</strong> and <strong>income</strong>. It’s true that incomes haven’t kept up with the <em>price</em> of houses. However, <a href="https://www.simplifyingthemarket.com/2020/09/22/the-cost-of-a-home-is-far-more-important-than-the-price/?a=712984-fa409495d5d70154d03a25e81e9540e2">affordability</a> is about the <em>cost</em> of the home, not just the price. For that reason, <strong>mortgage rates</strong>, the third element of the affordability equation, are important to consider.</p>
<p data-wp-editing="1">For example, here’s the <em>typical mortgage payment</em> for assorted dates going back to 2000, as calculated by <a href="https://www.corelogic.com/blog/2020/12/affordability-challenges-ahead-large-demographic-tailwind-has-arrived-amid-lowest-inventory-of-homes-for-sale.aspx"><em>CoreLogic</em></a>:<a href="https://files.simplifyingthemarket.com/wp-content/uploads/2021/02/10130509/20210211-MEM-Eng-1.jpg"><img alt="47% of New Buyers Surprised by How Affordable Homes Are Today | Simplifying The Market" class="aligncenter wp-image-43852" decoding="async" height="488" loading="lazy" sizes="auto, (max-width: 650px) 100vw, 650px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/02/10130509/20210211-MEM-Eng-1.jpg" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/02/10130509/20210211-MEM-Eng-1.jpg 1000w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/02/10130509/20210211-MEM-Eng-1-400×300.jpg 400w" width="650"/></a>Outside of the housing crash (when short sales and foreclosures drove prices down), it’s more affordable to buy a home today when you consider all three elements of the affordability equation: <strong>price, income,</strong> <strong>and mortgage rate</strong>.</p>
<h3><strong>Bottom Line</strong></h3>
<p>Whether you’re a first-time buyer or a move-up buyer, don’t let the headlines scare you away from your dream of homeownership. Instead, connect with mortgage and real estate professionals to determine what you can afford and what’s available at that price. Like almost half of the buyers in the survey, you may be pleasantly surprised.</p>
</div>
</div></article>