SkyBlue PortlandSkyBlue Portland

Real Estate Group

971-804-4618
  • Menu
  • Homes
    • Portland
      • Portland
      • Downtown Portland
      • North Portland
      • Northeast Portland
      • Northwest Portland
      • Southeast Portland
      • Southwest Portland
    • East of Portland
      • Clackamas
      • Gresham
      • Happy Valley
    • South of Portland
      • Canby
      • Charbonneau
      • Gladstone
      • Lake Oswego
      • Milwaukie
      • Oregon City
      • Sherwood
      • Tigard
      • West Linn
      • Wilsonville
    • West of Portland
      • Aloha
      • Beaverton
      • Hillsboro
  • Condos
    • Downtown & Goose Hollow
    • North Portland
    • Northeast Portland
    • Northwest Portland
    • Pearl District Condos & Lofts For Sale
    • Southeast Portland
    • Southwest Portland
    • South Waterfront
    • East of Portland
      • Gresham
      • Happy Valley
    • South of Portland
      • Lake Oswego
      • Progress Ridge
      • Sherwood
      • Tigard
      • Tualatin
      • West Linn
      • Wilsonville
    • West of Portland
      • Beaverton
      • Hillsboro
  • Custom Search
    • Price Search
      • Portland
      • Aloha
      • Beaverton
      • Gladtone
      • Gresham
      • Hillsboro
      • Lake Oswego
      • Milwaukie
      • Oregon City
      • Sherwood
      • Tigard
      • Tualatin
      • West Linn
      • Wilsonville
    • Home Style Search
    • Master on the Main
    • New Construction
      • North Portland
      • Northeast Portland
      • Southeast Portland
      • Southwest Portland
      • East of Portland
      • South of Portland
      • West of Portland
    • Floating Homes
    • Open Houses
    • Custom Search
  • Neighborhood Guides
    • Beaverton Neighborhood Guides
      • Neighbors Southwest
    • Lake Oswego Neighborhood Guide
      • Blue Heron Neighborhood Guide
      • Bryant Neighborhood Guide
      • Lake Grove Neighborhood Guide
      • Mountain Park Neighborhood Guide
    • Portland Neighborhood Guides
      • Hosford-Abernethy
      • Kenton
      • Peninsula Park Rose Garden
      • St. Johns
    • West Linn Neighborhood Guide
      • BHT
      • Bolton
      • Hidden Springs
      • Marylhurst
      • Parker Crest
      • Robinwood
      • Rosemont Summit
      • Savannah Oaks
      • Skyline Ridge
      • Sunset
      • Willamette
    • West Linn Spray Parks
      • Hammerle
      • Marylhurst Heights
      • Robinwood
      • Tanner Creek
      • Willamette Spray Park
  • Buyers
    • Your Buyer’s Agent
    • 5 Steps to Getting a Mortgage
    • Buyer Consultation
    • The Home Inspection: Do You Need It?
    • 10 Steps to Relocating to Portland, Oregon
    • Tips for the First Time Home Buyer
    • Free Buyer Guide
    • Blog Articles
    • Market Alerts
  • Sellers
    • Guide to Selling Your Home
    • How to Sell Quickly
    • Luxury Home Pricing
    • Selling Your Home in Today’s Market
    • Free Seller Planning Guide
    • Blog Articles
    • Instant Home Valuation
  • About Us
    • Meet the SkyBlue Portland Team
    • Rachel Bradley, Licensed Oregon Principal Real Estate Broker
    • Susan Bradley, Licensed Oregon Real Estate Broker
    • James Bradley, Licensed Oregon and Washington Real Estate Broker
    • Ginger Bogue, Licensed Oregon Real Estate Broker
  • Blog

Forget the Price of the Home. The Cost is What Matters.

 

Home buying activity (demand) is up, and the number of available listings (supply) is down. When demand outpaces supply, prices appreciate. That’s why firms are beginning to increase their projections for home price appreciation going forward. As an example, CoreLogic increased their 12-month projection for home values from 4.5% to 5.6% over the last few months.

The reacceleration of home values will cause some to again voice concerns about affordability. Just last week, however, First American came out with a data analysis that explains how price is not the only market factor that impacts affordability. They studied prices, mortgage rates, and wages from January through August of this year. Here are their findings:

Home Prices

“In January 2019, a family with the median household income in the U.S. could afford to buy a $373,900 house. By August, that home had appreciated to $395,000, an increase of $21,100.”

Mortgage Interest Rates

“The 0.85 percentage point drop in mortgage rates from January 2019 through August 2019 increased affordability by 9.7%. That translates to a $40,200 improvement in house-buying power in just eight months.”

Wage Growth

“As rates have fallen in 2019, the economy has continued to perform well also, resulting in a tight labor market and wage growth. Wage growth pushes household incomes upward, which were 1.5% higher in August compared with January. The growth in household income increased consumer house-buying power by 1.5%, pushing house-buying power up an additional $5,600.”

When all three market factors are combined, purchasing power increased by $24,500, thus making home buying more affordable, not less affordable. Here is a table that simply shows the data:Forget the Price of the Home. The Cost is What Matters. | Simplifying The Market

Bottom Line

In the article, Mark Fleming, Chief Economist at First American, explained it best:

“Focusing on nominal house price changes alone as an indication of changing affordability, or even the relationship between nominal house price growth and income growth, overlooks what matters more to potential buyers – surging house-buying power driven by the dynamic duo of mortgage rates and income growth. And, we all know from experience, you buy what you can afford to pay per month.”

Posted in: Home Buyers, Home Sellers

How Much is Your Home Worth in Today’s Hot Market?

Post navigation

« This is Not 2008 All Over Again: The Mortgage Lending Factor

How the Market?

Click the image to get up to date market stats.

Meet the SkyBlue Team

https://www.skyblueportland.com/wp-content/uploads/2018/08/SkyBlue-Meet-the-Team-1.mp4

Instagram

skyblueportland

SkyBlue Portland Real Estate Team. Licensed in Oregon & Washington. Your team! #skyblueportland

Instagram post 2195349473486710768_1178988804 Grand Central Bakery’s annual Gingerbread Snack Cake. Other Worldly! 😍😍😍
Instagram post 2175857239217463553_1178988804 Espresso for two (cappuccino & macchiato) at Water Avenue Coffee on Portland’s inner east side.
Instagram post 2172931053336230793_1178988804 Coffee break at the Woodlark Hotel.  #pdx #skyblueportland
Load More... Follow on Instagram

What’s Your Home Value?

Search for:
Search for:



SkyBlue Portland Real Estate Group
Premiere Property Group, LLC
5000 Meadows Road - Suite 150
Lake Oswego OR 97035

© 2019 · Equity Framework

SiteMap

Log in