Homes For Sale In Bergen County NJ | House-Buying Power at Near-Historic Levels

Dated: 07/20/2018

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Homes For Sale In Bergen County NJ | House-Buying Power at Near-Historic Levels

House-Buying Power at Near-Historic Levels | MyKCM

Houses for sale in Bergen County , NJ continue to experience a sellers market particularly in the entry to middle level homes.  It's extremely important to find an agent that knows the market and knows how to negotiate for you because houses today are receiving 5+ offers each. 


Now let's talk about: House-Buying Power at Near-Historic Levels

We keep hearing that home affordability is approaching crisis levels. While this may be true in a few metros across the country, housing affordability is not a challenge in the clear majority of the country. In their most recent Real House Price Index, First American reported that consumer “house-buying power” is at “near-historic levels.”

Their index is based on three components:

  1. Median Household Income
  2. Mortgage Interest Rates
  3. Home Prices

The report explains:

“Changing incomes and interest rates either increase or decrease consumer house-buying power or affordability. When incomes rise and/or mortgage rates fall, consumer house-buying power increases.”

Combining these three crucial pieces of the home purchasing process, First American created an index delineating the actual home-buying power that consumers have had dating back to 1991.

Here is a graph comparing First American’s consumer house-buying power (blue area) to the actual median home price that year from the National Association of Realtors (yellow line).

House-Buying Power at Near-Historic Levels | MyKCM

Consumer house-buyer power has been greater than the actual price of a home since 1991. And, the spread is larger over the last decade.

Bottom Line

Even though home prices are increasing rapidly and are now close to the values last seen a decade ago, the actual affordability of a home is much better now. As Chief Economist Mark Fleming explains in the report:

“Though unadjusted house prices have risen to record highs, consumer house-buying power stands at near-historic levels, as well, signaling that real house prices are not even close to their historical peak.”

Source.. KCM Emily Millan Blog

 

If you have any questions about the Bergen County, NJ don’t hesitate to give us a call at 646-256-2214. We will be happy to help you.

 

To reach us, please call 646-256-2214

or send us an email to: [email protected]

Thinking of selling your home? Let Emily take over the marketing of your property for you.

 HomeValuesInNJ.com- Call or Text  646-256-2214 of for more information. 

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