Housing Affordability

For most of us we do not have a surplus of money to spend on our housing needs, we need to be smart and get value for every dollar spent.  So is it time to buy a home?  The answer is not as simple as most people think.  If you are in a financial position to purchase and you find a property that you like at a fair price then the answer is simple, yes it is time to buy.  Where is get more difficult is for people that have families that are renting.  Let’s face it, life gets in the way.  There are many financial challenges that get in the way.  For example, Divorce, Kids, Vehicle Needs, Medical Issues and any of hundreds of unexpected expenditures that all have their hands on the money we make. I have lived much of the above and why “I say life gets in the way.”

Here is a little more to think about,  home mortgage rates are going up and we are looking a rates in the mid 5% range most likely by the end of 2018.  For those of us old enough to have lived this we all know about the average rate of inflation running at 5%.  For a mortgage rate of 5% or less it is basically free money.  Below is the posted inflation rate table that pops up when “2018 inflation rate” is put into a website search engine.  For those of us living in Southern California this is way off.  Home values alone are going up much faster.

Capture            So the question comes down to housing affordability when considering purchasing a home.  Rents are going to continue to go up and housing affordability is going to continue to go down.  So do you move to a lower priced area or a smaller place?  I would consider looking at long term plans of 7 to 10 years and where do you see yourself living? The decision on housing is a personal choice that we most all make individually.  For most of us, the short term financial sacrifices are worth the long term benefits.  It is ok not to rush into purchasing a home.  Find a professional Real Estate Agent in your target area and get a full understanding of the homes values.  Then speak with a professional Mortgage Banker / Loan Officer to see if the cost is within your budget plans.  When armed with the financial facts the picture comes clear.

One last thing to think about, most people that invest in the stock market seem to lose money, why is that?  Have you ever considered that we seem to speak with family members or friends for our financial advice?  We all love our families and friends but there is a clear pattern here.  It is always good to talk things out with our families or friends but you should always seek out advise from professional people before making any larger purchases.


Stay Tuned…



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