The power to buy a house
Actual house prices might be rising, but according to new data, home buying power is still pretty high. In fact, according to the Real House Price Index from First American, U.S. home buying power is actually up over seven years ago.Verify your new rate (Aug 15th, 2020)
Home buying power remains strong
The Real House Price Index takes into account mortgage rates, household incomes and home prices to gauge how much consumers can actually afford. And despite rising home prices and rising rates, according to the most recent RHPI, that home buying power is up, historically speaking.
The RHPI shows consumer house buying power has increased nearly 24 percent since 2011.
First American Chief Economist Mark Fleming explains: “House buying power, how much one can buy based on household income and the 30-year, fixed-rate mortgage rate, has benefited from a declining rate environment, and slow, but steady household income growth. Nationally, since the start of the nearly seven-year run of increasing unadjusted house prices in 2011, house buying power has increased 23.6 percent.”Verify your new rate (Aug 15th, 2020)
What city has the most buying power?
Home buying power is actually highest in some of the nation’s priciest markets. San Jose, California, for example, claims the most house buying power in the nation. Its residents are able to afford a home priced at $660,884, on average.
Washington, D.C., has the second-highest buying power, with residents able to afford homes at $633K. San Francisco ($583K), Boston ($509K) and Seattle ($486K) round out the top five.
“Unsurprisingly, the top five cities coincide with the five cities with the highest household income – make more to buy more,” Fleming said. “These cities also boast higher than national average household income growth – 4.9 percent from May 2017 to May 2018.”
Get today’s mortgage rates
Want to get in on the market before home buying power dwindles? Then shop around and see what mortgage rates you qualify for today.Verify your new rate (Aug 15th, 2020)