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IS HOUSING STILL AFFORDABLE?

IS HOUSING STILL AFFORDABLE?
	Interest rates are rising but historic buying opportunity remains
	What if mortgage interest rates suddenly rose above 5 percent? Would you still consider housing affordable? To answer that question, it helps to have some historical perspective. A decade ago, when 30-year mortgage interest rates hit 5.25 percent, homebuyers and homeowners rushed to take advantage of the lowest rates in almost 40 years. Many of those people had owned their homes since the mid 1990s when rates were in the 8- to 9-percent range. And some even remember the early '80s when rates were as high as 18 percent. Five and a quarter? That was practically free money. Then came the housing boom...followed by the bust...followed by the Fed's massive stimulus programs, all of which drove the average 30-year mortgage rate from 6.76 percent in June 2006 down below 5 percent in April 2009, below 4 percent in November 2011 and finally below 3.5 percent late last year. @properties Market Minute: Supporting the community is a big part of @properties' business. Watch the video.   June marks the 38th consecutive month that 30-year mortgage rates have averaged less than 5 percent, and many people have been lulled into thinking that sub-5-percent mortgage rates are perfectly normal. They're not. Today, people are finally starting to sense the end of a historic period in housing finance. With both interest rates and home prices rising in tandem for the first time in a long time, it appears that affordability has peaked. That's no reason for would-be buyers to feel discouraged. The window of opportunity is still open...wide open in fact, and it should be for a while longer. With home prices still well below their 2006 highs and the affordability gap between renting and owning heavily favoring buyers, 2013 is as good a time as any to purchase real estate, whether you're moving up, down, buying your first home or making an investment. If you're lucky, you might be able to snag a 30-year rate that starts with a "3." But if you happen to wind up with a rate in the "4's" don't lament. Historically speaking, you're doing very, very well. If you are interested in buying or selling a home in the city, or are just looking for more information on your local real estate market, please contact me. I appreciate your business and your referrals. In the news: Farewell 3% mortgage rates By Les Christie | June 6, 2013 In the past month, rates have been on the rise and they are expected to continue to climb. This week, the average rate on a 30-year fixed-rate mortgage jumped another 10 percentage points to 3.91% and are up from 3.3% in early May, according to mortgage giant Freddie Mac. Meanwhile, those seeking a 15-year loan received an average rate of 3.03%, up from 2.56% -- a record low. More Completed foreclosures hold steady in April By Reuters | May 29, 2013 The number of foreclosed homes held steady in April, while there were fewer properties sitting in the pipeline, fresh signs the housing recovery is on track, data from CoreLogic showed on Wednesday. There were 52,000 foreclosures completed last month, the same amount as in March, but down about 16 percent from 62,000 in April last year, CoreLogic said. More Confidence in Housing Market Spikes By Teke Wiggin | June 10, 2013 In May, Americans got a lot more optimistic about the housing market. Both the share of Americans who believe now is a good time to sell and the share of Americans who think now is a good time to buy rose sharply from April to May, with widespread reports of rising home prices, according to Fannie Mae. More