Homes in USA have become more affordable thanks to low mortgage rates

  • Nationally, homes are just about the most affordable they’ve been in the last 40 years. In 2016, the median household could afford a home 1.5 times more expensive than the median home price. In 1980, the median household could only afford about 3/4 of the median home price.
  • At the same time, income growth has been outpaced by home price growth. Adjusting for inflation, incomes have grown 27% between 1980 and 2016, while home prices have grown 62%.
  • Despite relatively stagnant incomes, affordability has grown due to the sharp drop in mortgage rates over the last 30 years – from a high of over 16% in the 1980s to under 4% by 2016.
  • Of the nation’s 100 largest metros, only Miami became unaffordable between 1990 and 2016. Meanwhile, 22 metros have flipped from being unaffordable to becoming affordable in that same time frame.


Miami is full of out of the area owners…locals affordability is not important

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They were affordable yesterday. :sweat_smile::sweat_smile::sweat_smile::sweat_smile:

In much of the US, only owners of the most expensive homes in a local market will see a loss in housing tax deductions. But on the California coast and along the Northeastern seaboard, most homeowners — even those with homes valued below the median — will lose deductions they had pre-tax reform.

For homeowners of a median-priced house in the Bay Area, the loss of mortgage interest and property tax deductions could total more than $100,000 over the course of a 30-year mortgage, according to Salviati’s calculations.

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I remember when we were chatting on Redfin, homes there were $20K, most brand new. :disappointed_relieved:

US housing is undervalued by 33%. Housing boom will continue for 7 more years.

Appreciation will be faster in other states in the next few years beyond 2020.

I’m afraid that US will have a super housing boom cycle that’ll make homeowners filthy rich all over the country. Is this a good thing?

Well, somebody here has to tell me what the problem is then.

If we had plenty of homes, prices would be cheaper. Prices would have never, ever gotten that high as we have seen then. Right?

I call BS on that.

Is this in the article?(Haven’t read it completely yet)

Still cheap in Orlando, Tampa and Daytona beach…Miami has to many foreign investors with funny money…

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Average buyer can afford 1.5 times of the median price. If we increase home price by 50% overnight, they can still afford.

The undervaluation is due to millennial’s delay in home purchase. They will push the price up Hu 50% to correct the under pricing of homes soon. Millenials will buy homes in droves and they may push home prices up 100% to cause an overshoot to over-valuation

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I don’t know where they got that “affordability index”. Homes are definitely not more affordable than they were in 2011. Look at the price difference and your paycheck from 2011. Most homes have gone up 150% from 2011. Has your paycheck gone up that much? Mortgage rates are about the same. Whoever wrote that blog is a moron or has an agenda to push and is lying.


It’s for USA, not for BA, not California alone. BA is not a good sample of the national market

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Still cheap in Tahoe…barely back to 2006 high…Not including the 12 years of cpi inflation since

California would be worser as my kids say, if the big shots hadn’t sent jobs to over states.

The problem with posters on this forum is that, contrary to sheriff and I, you guys have reached a level where increases on anything, but your mortgages, won’t effect you. We the hassling individuals are the ones chasing our tales with commissions and wages stagnant for the last 30 years.

Orlando still cheaper than 2006

Yet BA real estate is only getting hotter. That would seem impossible with the cap on SALT and mortgage interest deductions.

Overall, the trend isn’t surprising at all. If you want to make something go up in value, provide people easy financing to buy it.

On inflation alone house prices should be 26% higher than 2006…builders are not building…Costs are double those in 2005 and there is a shortage of entitled land, workers and buyers that can afford these new houses…Existing home prices will keep going up, nationwide…Fixers that need sweat equity have the most potential…

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I don’t want to see easy financing. It is the beginning of pushing people to the end of the cliff.

It would be good for those guys knowing when the bubble it will burst. Others, like many thousands of unsuspected home owners aka “losers” trying to flip at the end of the bubble will cry wolf when they heard his howling.