Can an Expensive Home Still Be Affordable In Connecticut
Can an Expensive Home Still be Affordable In Connecticut ?
Real estate prices across the country have increased dramatically in the past year. With increaases in the 10-12% range, many potential homebuyers have given up and decied that homes are just too expensive to consider. While homes have become more expensive, it does not mean they are unaffordable.
Wold you believe that we are experiencing a historically favorable market for buyers when it comes to affordabilty? Why? This is because affirdability involves more than just the purchases price of the home, When considering weather you can afford a home you must include wage growth and interest rates.
Interest rates are among the lowest we've seen in decades. In addition wages are increasing at a staggering 7% rate year-over-year. For example a median household income of $68,000/year with a 7% wage growth, will see an extra $400/month.
The median home price is about $325,000. If we add a 10% growth factor to this, that same home would sell for $357,500. At a 3.5% interest rate, the monthly payment would increase from $1313/month to $1444/month, an increase of only $131/month. In terms of affordability, todays's market offers homebuyers more for their money.
Many homebuyers indeed have sticker shook; homes are getting more expensive. Buy for many homebuyers, other economic factors combine to make homes more affordable than ever before.