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Emerald Coast Homes are More Affordable than Ever

If you’ve been searching Emerald Cost homes, then you might be interested to learn that home affordability is currently at the highest level we’ve seen in decades.  Nearly 78 percent of homes sold during the first quarter of 2012 were affordable to individuals who earned the national median income of $61,000 – this according to a report released yesterday by the National Association of Home Builders and Wells Fargo.

Here are some general figures to give you an even better idea of what this means:

  • To purchase a home at the national median price of $158,000 with 5 percent down, the loan applicant would need an annual household income of $34,700.
  • To purchase a home at the national median price of $158,000 with 10 percent down, the loan applicant would need an annual household income of $32,900.
  • To purchase a home at the national median price of $158,000 with 20 percent down, the loan applicant would need an annual household income of $29,300.

These figures are assuming a 4 percent interest rate, good credit, and 25 percent of gross income allocated to principal and interest.

There are few reasons for this historic affordability index.  For starters, home values are still about 36 percent away from their peak, while the annual median income has increased by about 10 percent on a national level.  Mortgage rates also remain at record lows, hovering around the 4 percent mark.

While homes in Emerald Coast have never been more affordable, mortgage lending guidelines are far tighter than they were before the housing bubble burst.  Lenders are also requiring more documentation to verify that the borrower can afford the monthly mortgage payments associated with their loan program.  For borrowers with average credit, FHA may still be the best option, but this often comes with a higher interest rate and private mortgage insurance, making monthly payments higher than conventional loan programs.

If you are interested in searching Emerald Coast homes, contact Kerry Veach.  Kerry is an experienced Realtor who can help you buy or sell Emerald Cost real estate.  With over 1,000 closings and a full-time real estate team, it’s no wonder that 95% of Kerry’s business comes from referrals.

 

 

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