top of page

Home Affordability in Today’s Real Estate Market

Updated: Jan 12

One of the concerns that home buyers focus on in today's residential real estate market is affordability. While it is true that most homes today are less affordable than they were a couple of years ago, this does not mean that having one is unattainable.

More Than Just Home Prices

Home affordability is determined by various components. It is measured mostly by these factors: Mortgage Rates, Home Prices, and Wages. This is why we cannot base affordability by just looking at market prices.

Mortgage Rates

Despite the fact that mortgage rates have become more challenging to predict due to ongoing global uncertainties, it can be inferred from historic tables that the current rates are almost a full percentage point higher than the rates last year. The average monthly rate for February 2022 was 3.76%, while it was only 2.81% last year, according to Freddie Mac.

Source: Freddie Mac 30-Year Fixed-Rate Historic Tables

Home Prices

Last year, home values have increased by 19.1%, based on the report by CoreLogic. The Home Price Insights forecast below shows a month-over-month increase by 0.2% from January 2022 to February 2022.

Source: The CoreLogic Home Price Insights Forecast


Source: National Association of Realtors Housing Affordability Index Published Feb. 14, 2022

One good thing that we can look at is the increase in American wages. Since income is one of the factors considered when qualifying, it is still possible to buy homes today. According to the Housing Affordability Index by NAR, the median family income (in blue) is greater than the qualifying income needed to purchase a median-priced home (in green) in all four regions. This means that there are still affordable homes in most parts of the country.

Wrap Up

By knowing the key components that affect home affordability, it is clearer that living the dream of owning a home could be challenging, but not impossible. Simply said, homes may be less affordable today, yet not unaffordable as most people think. Whether you are looking to find homes locally or plan to relocate to a different place, there are surely options that will give you the opportunity to live the best life that you deserve.

Contact the best real estate agent in Long Island and the top real estate agent team in town: The Island Wide Team! We'd more than love to help you find the perfect home!


Disclaimer: Views and information provided in this post are for general informational and educational purposes only and is not a substitute for professional advice. Before taking any action based upon such information, we encourage you to consult with the appropriate professionals. The use or reliance to any information contained on this site or mobile application is solely at your own risk.

Blue and Pink Modern Tech Electronics and Technology Retractable Exhibition Banner (6).png
bottom of page