Taking Advantage of Homebuying Affordability in Today’s Local Oklahoma Real Estate Market

Taking advantage of Homebuying Affordability in Today's Local Oklahoma Real Estate
Take Advantage of Homebuying Affordability in Today’s Local Oklahoma Real Estate Market by Sabrina Shaw

Everyone is ready to buy a home at different times in their lives, and despite the health crisis, today is no exception. In fact, the health crisis is one major reason many of my clients in Kiefer OK 74041, Mounds, OK 74047, Jenks OK 74132, and Bixby OK 74008 are selling their starter homes so they can move up to a bigger home that is more conducive for the new normal. Understanding how affordability works and the main market factors that impact it may help those who are ready to buy a home narrow down their optimal window of time to make a purchase.

There are three main factors that go into determining how affordable homes are for buyers:

  1. Mortgage Rates
  2. Mortgage Payments as a Percentage of Income
  3. Home Prices

The National Association of Realtors (NAR), produces a Housing Affordability Index, which takes these three factors into account and determines an overall affordability score for housing. According to NAR, the index:

…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.

National Association of Realtors

Their methodology states:

To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-price home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-price home, assuming a 20 percent down payment.

National Association of Realtors

So, the higher the index, the more affordable it is to purchase a home. Here’s a graph of the index going back to 1990:

Housing Affordability Index
Housing Affordability Index

The green bar represents today’s affordability. We can see that homes are more affordable now than they have been at any point since the housing crash when distressed properties(foreclosures and short sales) dominated the market. Those properties were sold at large discounts not seen before in the housing market.

Why are homes so affordable today?

Although there are three factors that drive the overall equation, the one that’s playing the largest part in today’s homebuying affordability is historically low mortgage rates. Based on this primary factor, we can see that it is more affordable to buy a home today than at any time in the last seven years. In the past week, I had a client from TTCU qualify for a 2.89% 30 year conventional mortgage and a client with ZFG mortgage qualify for a 3% on a first time home buyer conventional loan.

If you’re considering purchasing your first home or moving up to the one you’ve always hoped for in Kiefer 74041, Mounds 74047, Bixby 74008, or Jenks 74132, it’s important to understand how affordability plays into the overall cost of your home. With that in mind, buying while mortgage rates are as low as they are now may save you quite a bit of money over the life of your home loan. If you would like to have a zero obligation talk to discuss your specific situation to see if now is the right time for you DM, call, or text me at 918-637-7826.

Bottom Line

If you feel ready to buy, purchasing a home this season may save you significantly over time based on historic affordability trends. Let’s connect today to determine if now is the right time for you to make your move. Here at Homes by Sabrina brokered by eXP Realty, we believe everyone should love where they live!

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