Buying a Home, Still Affordable

Schedule time with me # Buying a Home, Still Affordable Dated: May 26 2021 Views: 34 ### Buying a Home Is Still Affordable  The last year has put emphasis on the importance of one’s home. As a result, some renters are making the jump into homeownership while some homeowners are re-evaluating their current house and considering a move to one that better fits their current lifestyle. Understanding how housing affordability works and the main market factors that impact it may help those who are ready to buy a home narrow down the optimal window of time in which to make a purchase. There are three main factors that go into determining how affordable homes are for buyers: 1. Mortgage Rates 2. Mortgage Payments as a Percentage of Income 3. Home Prices The _National Association of Realtors_ (NAR) produces a [Housing Affordability Index](https://www.nar.realtor/blogs/economists-outlook/housing-affordability-increases-in-march-as-incomes-surge "Housing Affordability Index"). It takes these three factors into account and determines an overall affordability score for housing. According to NAR, the index: > _“…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.”_ Their methodology states: > _“To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.”_ So, the higher the index, the more affordable it is to purchase a home. Here’s a graph of the index going back to 1990:[](https://files.simplifyingthemarket.com/2021/05/25161625/20210526-MEM-Eng-1.png?a=1940-ee10a00d9ce1f206ef9b956c7c6b6c48)The blue bar represents today’s affordability. We can see that homes are more affordable now than they’ve been at any point since the housing crash when distressed properties (foreclosures and short sales) dominated the market. Those properties were sold at large discounts not seen before in the housing market for almost one hundred years. #### **Why are homes so affordable today?** Although there are three factors that drive the overall equation, the one that’s playing the largest part in today’s homebuying affordability is historically low mortgage rates. Based on this primary factor, we can see that it’s more affordable to buy a home today than at any time in the last eight years. If you’re considering purchasing your first home or moving up to the one you’ve always hoped for, it’s important to understand how affordability plays into the overall cost of your home. With that in mind, buying while mortgage rates are as low as they are now may save you quite a bit of money over the life of your home loan. ### **Bottom Line** If you feel ready to buy, purchasing a home this summer may save you a significant amount of money over time based on historical affordability trends. Let’s connect today to determine if now is the right time for you to make your move.  ### [Deanna Dellinger](https://www.lovingeasttennessee.com/agents/269187/Deanna+Dellinger) BUYERS: As a dedicated Realtor in Sevier County, Tennessee, I’m passionate about connecting people with the perfect investment properties in the scenic Smoky Mountains. Whether you'r.... - [](https://www.facebook.com/lovingeasttennessee) - [](https://www.instagram.com/dellingerdeanna) - [](https://www.pinterest.com/deannadellinger) - [](https://www.twitter.com/DeannaDellinger) - [](https://www.youtube.com/deannadellinger) - [](https://www.linkedin.com/in/deanna-dellinger-164a7511) Login To Leave A Comment # Latest Blog Posts ## [July 2025 Sevier County Real Estate Market Update](https://www.lovingeasttennessee.com/blog/293184/July+2025+Sevier+County+Real+Estate+Market+Update) Posted by [Deanna Dellinger](https://www.lovingeasttennessee.com/agents/269187/Deanna+Dellinger) August 13 2025 [0 comments](https://www.lovingeasttennessee.com/blog/293184/July+2025+Sevier+County+Real+Estate+Market+Update) Sevier County’s real estate market is shifting gears. July 2025 brings cooler listing activity, softer pricing, and longer selling times—but steady sales volumes show that buyers are [Read More](https://www.lovingeasttennessee.com/blog/293184/July+2025+Sevier+County+Real+Estate+Market+Update) ## [Home Prices Have Risen Dramatically Over the Past 5 Years](https://www.lovingeasttennessee.com/blog/271267/Home+Prices+Have+Risen+Dramatically+Over+The+Past+5+Years) Posted by [Deanna Dellinger](https://www.lovingeasttennessee.com/agents/269187/Deanna+Dellinger) March 7 2025 [0 comments](https://www.lovingeasttennessee.com/blog/271267/Home+Prices+Have+Risen+Dramatically+Over+The+Past+5+Years) Your house could be worth way more than you think. Home prices have jumped nearly 60% in the past 5 years, and that means your house is probably worth more too. Here’s how that [Read More](https://www.lovingeasttennessee.com/blog/271267/Home+Prices+Have+Risen+Dramatically+Over+The+Past+5+Years) ## [The Perks of Buying a Newly Built Home](https://www.lovingeasttennessee.com/blog/270827/The+Perks+Of+Buying+A+Newly+Built+Home) Posted by [Deanna Dellinger](https://www.lovingeasttennessee.com/agents/269187/Deanna+Dellinger) March 3 2025 [0 comments](https://www.lovingeasttennessee.com/blog/270827/The+Perks+Of+Buying+A+Newly+Built+Home) Is a Newly Built Home Right for You? The Pros and ConsWhen searching for a home, you don’t want to skip over new builds as an option. Right now, there are more newly built homes to choose from [Read More](https://www.lovingeasttennessee.com/blog/270827/The+Perks+Of+Buying+A+Newly+Built+Home) ## [Options Like Buydowns, ARMs, or Assumable mortgages Could Make Homeownership More Affordable](https://www.lovingeasttennessee.com/blog/269916/Options+Like+Buydowns%2C+Arms%2C+Or+Assumable+Mortgages+Could+Make+Homeownership+More+Affordable) Posted by [Deanna Dellinger](https://www.lovingeasttennessee.com/agents/269187/Deanna+Dellinger) February 24 2025 [0 comments](https://www.lovingeasttennessee.com/blog/269916/Options+Like+Buydowns%2C+Arms%2C+Or+Assumable+Mortgages+Could+Make+Homeownership+More+Affordable) How To Buy a Home Without Waiting for Lower RatesMany people are hoping mortgage rates will come down before they buy a home. But will that actually happen? According to the latest forecasts, [Read More](https://www.lovingeasttennessee.com/blog/269916/Options+Like+Buydowns%2C+Arms%2C+Or+Assumable+Mortgages+Could+Make+Homeownership+More+Affordable) [  Chat With Me ](https://m.me/deanna.dellinger)  Original text Rate this translation