Prefer to talk in person? Find a mortgage specialist on Zillow

Housing Affordability - Record high!!!!!

What does this mean to us?
  • November 01 2010 - Columbus
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (12)

Profile picture for the_country_hick
It means that ultra low interest rates are propping up house prices. Prices are NOT more affordable than anytime in the past. Instead borrowing costs are very low. When those borrowing costs increase house prices must decrease.

I am waiting for BOTH lower prices and higher interest rates to arrive. At that time houses should be truly affordable and not lose 1/4 of their value from a 2% increase in interest rates.
  • November 01 2010
  • 3Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Dan,

How are you so sure that you will have both?

  • November 01 2010
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for the_country_hick
Eugene, when interest rates go from 5% to 7% it takes away 23.9% of buying power. That effectively turns a $200k (at 5%) payment into a $152k (at 7%) payment at the same monthly cost.

Since I see no way in this economy that wages can increase by 1/4 and most people buy at the top of their buying ability it can only drive prices lower. Lending standards are such that no liar loans will happen. Thus only more realistic means of financing will be available.
  • November 01 2010
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I don't think that "when interest rates go from 5% to 7% it takes away 23.9% of buying power", 23.725% is more likely.
  • November 01 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

This is the best time to buy if you can qualify. The rates are great.
  • November 01 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Blue Nile
"Affordable Housing" according to Federal, State, and City legislation means "government subsidized" and "government controlled".  And yes, the government is still subsidizing housing, and has increased housing subsidies in the form of lower interest rates with borrowed Chinese money.

All subsidies have ever done is raise market values, which decreases affordability.  It is simply government double speak.

And you get locked in on a 30 year 4% fixed rate interest loan, and then have to move in 5 years due to unexpected circumstances?  What are you going to do then when interest rates are 5% and the value of your house has gone done 12% and your loan is "underwater"?

I have seen no local nor national studies showing the change in ratio of housing costs to income over the past 80 years, especially none that indicate that people are spending a lower percentage of their income on housing now than they did in the 1950's.

But I am looking forward to downloading the 2010 census data, especially the housing cost data, when that becomes available.  I already downloaded the National, State, County, City and individual block-group data in my city for the 1990 and 2000 census.  But I didn't hear about any "long forms" being sent out this year, so I'm wondering if we really will see all the data.

Don't forget to factor in all those that are "under-employed", "part time employed", haven't received a raise for inflation for years/decades, and those that are unemployed in your calculations of "housing costs to income ratio".  And no, an "average" will not do as those at the top 1% of income or higher are not seeing any decline on their income, but only increases, and they don't subsidize the majority of people's home expenses, except through the government subsidies that raise housing costs.
  • November 01 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

This is the best time to buy if you can qualify. The rates are great.

That's original. How did you come to this analysis?
  • November 01 2010
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Great analysis Pasadenan - Let's remember to keep one thing in perspective...  High housing affordability simply means it is a great time to buy a house. It does not mean it is easy to get a loan.
  • November 01 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Blue Nile
It is extremely easy to get a loan, when you have good documentation of good income, no debt, and a middle FICO score of over 800.  I can get a loan any day I want, and just was offered two more 0% interest rate credit cards for 12 months (9.9% after the 12 months) last week.

But why get a loan when you don't need the money, and why buy something else when prices are inflated?
  • November 01 2010
  • 2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

2008 was the best time to buy...
until 2009, that was the bestest time to buy...
until 2010 the bestestest time to buy...
until 2011 the super bestestest time to buy!

Yep, gotta love nitwit analysis!
  • November 01 2010
  • 2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Gotta give you a thumbs up for that answer Pasadenan - I couldn't have put it any better. I agree, we have further to fall.......
  • November 01 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Not a thing unless there is someone out there to buy the affordable homes.  There is alot of risk in buying a home today.  Job security is always questionable and outstanding debt are 2 major reasons that hurt affordability!!!!  Can you say Credit Score and Debt Ratio...
  • November 12 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.