If you’ve been following the housing market over the last couple of years, you’ve likely heard about growing affordability challenges. But according to experts, the key factors that determine housing affordability are projected to improve this year.
The three measures used to establish home affordability are home prices, mortgage rates, and wages. Here’s a closer look at each one.
>>1. Mortgage Rates
Mortgage rates shot up to over 7% last year, causing many buyers to put their plans on hold. But things are looking different today as rates are starting to come down. Even a small change in rates can impact your purchasing power.
If 7% rates paused your homebuying plans last year, this could be the opportunity you need to get back in the game.
>>2. Home Prices
The second factor at play is home prices. Home prices have made headlines over the past few years because they skyrocketed during the pandemic. So, while prices will likely be flat this year in some markets, others could see small gains or slight declines. It all depends on your local area.
>>3. Wages
The final component in the affordability equation is wages. Because wages have been rising, many buyers have renewed opportunity in the market.
While affordability hurdles are not completely going away this year, based on current trends and projections, 2023 should bring some sense of relief to homebuyers who have faced growing challenges.
If you have questions, DM me to explore your options. You may be closer to owning a home than you think.
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