Core Logic Report Documents Declining "Typical Mortgage Payment" in recent months
In a newly released Core Logic report, mortgage payments in 2019 have so far declined, opening the door to increased demand for homes. In a real estate marketplace, demand for homes often shows up two ways: When we see increased sale prices for homes, and simultaneously see increased numbers of homes being sold, we can conclude that factors are favorable for demand to be on the rise.
According to the report, Last November the Typical Mortgage Payment (principle and interest costs) had climbed 17% year over year. That changed dramatically over the next five months as reducing interest rates caused the typical mortgage payment to drop by 1.0% while during the same time the average home price climbed by 3.3%. This reduction in the Typical Mortgage Payment can be an indicator of increasing affordability for the same priced home whcih can translate into increased demand (either in price or quantity) going forward.
From the Core Logic report:
"The typical mortgage payment is a good gauge of affordability over time because, when adjusted for inflation, it shows the monthly principal and interest amount homebuyers have committed to historically in order to buy the median priced U.S. home."
The bottomline is that if housing is more affordable due to declining interest rates, then either the value of the homes sold and or the number of homes sold is more likely to rise.
What does this trend mean for the Hampton Roads real estate market?
Like many national trends and analyses, the local impact of them can be varied. There are a number of factors impacting the local economy and the value of your home. Does this mean that home prices might more easily rise across the nation? Could be. How does this impact your home's value? Probably the best way to determine that is to talk with one of our real estate associates about your specific situation.
They will help you get the right information you need to make a home buying / selling decision or simply to help you know where you are in today's market. They have the experience and "know how" to provide you what you need to make the right decision for your situation.