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January 13, 2011

Housing Affordability is the best it has been for a very long time
Recently there has been a lot of talk about housing affordability. As a matter of fact looking at our national figures for last month the median sale price for a home in the Western region of the country was close to $215,000, the mortgage rate was at about 4.5% and the monthly payment including principle and interest would be about $879.00 (assuming a 20% down payment). The median Family income for the same region is about $65,000/year. Twelve payments of $879.00 equal $10,548, and that equals roughly 16.2% of the family income. The "Rule of Thumb" to qualify for mortgage is that the housing costs do not exceed 30% of family income. In the above example a family would need an income of about $42,000, and the hypothetical average income family, buying the Median priced home would be 154.5% qualified for a mortgage on that home.

The Average home in 2007 was priced 27 to 30% higher than it is today, and the interest rates while low at 6.5% were still 30 to 40% higher than today's rates. Nationally the average price for a 2007 home was $217,900. The monthly payment was $1,104. Last month average home price was $171,300 and the house payment was $698 or 37% lower than the same Median priced home cost in 2007. The median family income in 2007 was $61,173 and last month it was calculated to be $61,819 or almost unchanged.

A summary of all these numbers is that homes are using up less of our income today, because interest rates and prices are both down. (Both are slowly rising.) If you have an Average Family income of about $70,000 you can qualify for a home payment of about $1,750 per month (30% rule), or a purchase price of $500,000 with a 20% down payment.

For more specific information call 858-459-9109 in La Jolla and San Diego County or toll free 888-450-6691, email RuthMills@MillsTeam.com . If have a lender you have been talking to they can also show you what you can qualify for in this opportune La Jolla, UTC Del Mar and Carmel Valley real estate market. This area is one of the ten best markets in the country according to MSNBC and their sources.



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