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» VISIT US ONLINE @ DSNEWS.COM 17 Smaller than some. Second to none. Richard M. Squire & Associates, LLC (SquireLaw) represents a broad array of lenders and servicers effectively protecting their rights as creditors. SquireLaw is a one-stop, "cradle to grave" shop specializing in residential and commercial mortgage foreclosures, bankruptcies, ejectments (evictions), litigation of contested files, mobile home repossessions, land installment contract defaults, and REO closings. OUR ATTORNEYS ARE AVAILABLE 24/7. Serving: Pennsylvania and New Jersey Richard M. Squire & Associates, LLC One Jenkintown Station, 115 West Avenue, Suite 104 Jenkintown, PA 19046 (215)886-8790 rsquire@squirelaw.com jhess@squirelaw.com (Client Relations Representative) ARE HOMES MORE AFFORDABLE THAN WE THOUGHT? e housing market is feeling the squeeze as high prices, low inventory, and high demand all butt up against each other, making it difficult for many potential homebuyers to find a house of their own (or at least one they can afford). But is affordability really so dire in the grand, historic scheme of things? Recent research from Trulia discovered that, given the right context, homes might not be so unaffordable after all. In order to get a better sense of things, Trulia created an affordability score that compares the highest price the median household in a market can afford with median actual home prices in each year. e highest affordable price assumes a standard 20 percent down payment. If the affordability score is 100, that means the "affordable and actual prices are exactly the same," so anything over 100 means housing is affordable; a score below 100 means it is not. As Trulia puts it, "an affordable market is one in which the median household income's buying power meets or exceeds the median home price—even if prices are high, if household incomes are high enough to cover that price, then the market is considered affordable. Comparing current affordability scores to those of various past years, Trulia came to a surprising conclusion: nationally, homes are actually more affordable than is generally assumed. As Trulia reports, in 2016, the median household could afford a home 1.5 times more expensive than the median home price. In 1980, the median household could only afford about three-quarters of the median home price. Between 1980 and 2016, Trulia found that 22 metros had shifted from "unaffordable" status to "affordable." Moreover, of the 100 largest metros, only Miami trended from affordability into unaffordability during that period. However, it isn't all good news. During that same period from 1980 to 2016, incomes have grown by 27 percent (adjusted for inflation). Home prices, on the other hand? ose have grown a whopping 62 percent. Nevertheless, affordability has actually been on the rise over the past several decades, owing largely to the decrease in mortgage rates. In 1980, they were over 16 percent. In 2016? Under four percent. What does that mean in terms of dollars and cents? In 1981, Trulia found that the median home price was $136,156. However, the median income could only afford a home that cost $97,832. Trulia concluded that changes in mortgage rates had historically had a far larger impact on affordability than home prices did. If current mortgage rates were to hit their 1980 levels, "the median household would go from being able to afford a $312,653 home to a $144,805 home." at's a 54 percent decrease in affordability driven by only a 10 percent increase in mortgage rates.