The spring market will likely be a hotter one this year, as low interest rates and a healthier economy lure more home buyers to the marketplace.
NAR's latest housing report: Tight Supplies Put Home Prices on the Move
“Interest rates below 4 percent, rising rents, and healthier local job markets are convincing more consumers to consider home ownership,” Chris Polychron, National Association of REALTORS® president, said in a recent news release showing fourth-quarter 2014 home prices moving up.
An increase in the national family median income (to $65,782) mixed with low interest rates slightly improved affordability in the fourth quarter compared to the previous quarter, NAR reports. Affordability improved despite the national median single-family home price moving up to $208,700 in the fourth quarter, an increase of 6 percent year-over-year.
“Low interest rates helped preserve affordability last quarter, but it’ll take stronger income gains and more housing supply to help meet the pent-up demand for buying,” says Lawrence Yun, NAR’s chief economist.
To purchase a single-family home at the national median price, a buyer making a 5 percent down payment would need an income of $45,863. A 10 percent down payment would require an income of $43,449, and $38,621 would be needed for a 20 percent down payment.
The following were the five lowest-cost housing markets in the fourth quarter:
- Youngstown-Warren-Boardman, Ohio: $78,000
- Rockford, Ill.: $86,800
- Toledo, Ohio: $87,100
- Decatur, Ill.: $90,400
- Cumberland, Md.: $90,500