All Posts Tagged: affordability

Numbers Count: Where the buyers’ markets are

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Numbers count. They matter to bankers and to prospective homebuyers, sellers, and real estate professionals. Here’s my take on the key numbers on the housing market this week.

Small home for sale with wooded area behind showing fall colors.The numbers: Indianapolis is the easiest city for buying home, according to a new index from Realtor.com released Aug. 4. Realtor.com’s EasyToBuyIndex ranks the largest 50 U.S. cities based on several factors, including home availability, home prices, and affordability.

The top 10 cities in the index are all in the Midwest, East, and Southeast. Other cities on the list are Memphis, Cincinnati, Atlanta, and, in the #10 spot, Columbus, Ohio.

The index is based on four factors:

  • Average 30-year, fixed-rate mortgage
  • Number of homes for sale per 1,000 owner-occupied households
  • Percentage of median household income it takes to buy a home at the median list price
  • Percentage of active inventory below the maximum affordable price (determined by assuming a 28% loan-to-income ratio, median income, and a 20% down payment)
What counts: There’s plenty of news about high-priced, highly competitive housing markets, including my own market here in Denver. It’s a treat to be reminded there are two ends of any spectrum. Even if you are not in one of the cities on Realtor.com’s EasiestToBuy Index, it is always worth gauging if buyers in your market have leverage in purchase negotiations; and, if so, keep a few tips in mind:

1) Do your homework: Know the market, the neighborhood, and the house. Ask these questions of your real estate agent or as you’re doing your own research online: What have similar homes in the neighborhood sold for recently? Are sellers having to reduce prices after they’ve put homes up for sale? How long has the house you are looking at been on the market? Usually, the longer a house sits unsold, the stronger your hand becomes as a potential buyer.

2) Ask and you shall receive — maybe: Many sellers list their homes “as is.” But that doesn’t mean you can’t ask for a credit toward repairs or upgrades that you feel are important. If the roof leaks or there is termite damage, you’ll likely have to pay for those repairs after closing. So why not specify in your offer that you want the seller to provide a credit toward the cost of those fixes?

3) Close the gap on closing costs: Closing costs can run 1-2% of the cost of a home. It’s always a good idea to scrutinize those costs, but even more so in a buyers’ market. You may be able to press your lender to lower some fees or get the seller to pay some of the closing costs. It doesn’t hurt to ask.

Buying a home oftentimes involves negotiating. In tight markets there’s not a lot of that going on. But in a buyers’ market or a balanced market there may be room for give and take. It helps to know upfront what to ask for, and on any particular home to decide how badly you want it. If there are plenty of houses on the market, it may be easier to walk away from a deal if you can’t get the concessions you want from the seller.

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U.S. Outlook: Is housing ever going to recover?

Scott Anderson
Chief Economist
Graph showing downward trend in privately owned housing starts

This week brought another round of lackluster housing news.

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In the Market: Home affordability mapped

Nneka Madus
Posted by Nneka Madus
Mortgage Market Analyst
View of waterfront in Seattle with several housing structures near the water.

You’ll see a wide range of affordability across the map, which isn’t surprising.

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Numbers Count: Weekly mortgage data highlights

Wendy Cutrufelli
Mortgage Banking
For Sale sign in front of house

Wendy Cutrufelli offers her take on the key numbers on the housing market this week.

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U.S. Outlook: Is housing still on fragile ground?

Scott Anderson
Chief Economist
Housing affordability index - graph

We’re forecasting some improvement in April’s housing sales numbers and see other reasons for near-term optimism.

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