I am often asked if we have hit the bottom of the market yet. I think we have all been asking this same question for at least the last couple of years and if we said yes, we were obviously wrong. We will also continue to have at best a 50/50 chance of being right.
Here is what I do know. Home affordability is at an extremely attractive level. Since the peak in 2006, home prices have dropped at least 33% while mortgage rates have dropped even more than that.
Look at the chart below. The median priced house in the over heated 2006 market could be purchased for $1,451 per month. The median priced home in today's super cooled market has a monthly payment of just $760 per month. This is a 48% increase in affordability.
Will prices go lower? Will interest rates rise? All remain to be seen. However, if you are waiting for a better combination of low prices and low interest rates, you may have to wait a long time.
Let me show you what you can afford.
