How Affordability Plays A Big Role In Your Bend Home Buying Journey

There is no doubt that home values have risen quite unexpectedly this year while the housing inventory is at its lowest – making it a big challenge for those homebuyers who are very eager to purchase their homes now. So the big question for homebuyers nowadays is: Will it still be the best time to purchase a home today? And with that, affordability plays a really big role in a homebuyer’s journey. But how? Let’s find out.

What Is Affordability?

Affordability, according to financial-dictionary.com, is usually expressed in terms of the maximum price the buyer could pay for a house and be approved for the mortgage required to pay that amount. With that in mind, what really is that one factor that affects/influences the cost of a home, hence the buyer’s affordability in purchasing one?

The answer to that question is mortgage rates. It is the number one that affects homebuyer’s affordability today. With the record-low mortgage rates we have right now, a family with a median income could still afford to buy a home. In fact, according to Freddie Mac, the average interest rate for a 30-year fixed-rate mortgage is 2.72% – that would be 0.96% lower than that of last year which was 3.68%.

Bottom Line

If you are thinking of purchasing your first home, it’s very important to understand how affordability works. So if you’ll ask me what would be the first step in a home buying process? Be pre-approved for a loan first so that you’ll know how much of a home you can afford and at the same time the monthly amortization that you need to pay for it. In that way also, you’ll be able to narrow down your home search and eventually, learn how to how to allocate money for your home purchase.

Thinking of getting pre-approved for a loan? We could recommend a lender that we’ve been working with since before! Feel free to reach out to me any time of day at 541-306-3139 – I’d love to help you out!