Article By: Jim Porter – September 22, 2023
In 2012, 66% of all first-time homebuyers could afford to buy a house and now it is down to 32%. Housing affordability is made up of three components: Home prices, mortgage rates and wages.
Zillow predicts home prices to rise 5%, Freddie Mac 1% and Goldman Sachs revised their estimates recently from a 2% decline to a 1.8% increase. Mortgage rates just hit a 23-year-high this month, and although employment has softened a bit recently, wages are up and stable.
This market is different from any one we have seen over the past 35 years. The only crash that is happening is the significant decrease in the number of sales. Seventy percent of all homeowners have mortgage rates below 4% and have equity. There is no flood of inventory coming anytime soon.
I read this commonsense statement the other day on the internet: If you have some savings in the bank and can afford the house payment and you have a time horizon of 5 to 10 years, buy the house, make your house payments, ignore the media, and in 5 to 10 years you will be happy you bought the home.
This anonymous writer didn’t even mention the idea about “marry the house and date the rate” until you refinance in two or three years. It’s all about homeownership and the fact that people will always want to buy houses and own a home.
Check out some of the average mortgage rates over the past 40 years: 1983 – 13.2%, 1993 – 7.31%, 2003 – 5.83%, 2013 – 3.98%, 2023 – 7.15%.
Jim Porter, NMLS No. 276412, is the branch manager of Solano Mortgage, NMLS No. 1515497, a division of American Pacific Mortgage Corporation, NMLS No. 1850, licensed in California by the Department of Financial Protection and Innovation under the CRMLA / Equal Housing Opportunity. Jim can be reached at 707-449-4777.
Contact Us to Schedule a Mortgage Consultation
We’ll contact you with an evaluation.
100% Customer Satisfaction
Our goal is to provide 100% customer satisfaction. We do what it takes to keep our customers happy, to the best of our ability.