A combination of historically low mortgage rates and declines in home pricing are resulting in the most affordable home market in two decades. This is great news for home buyers, provided they are able to qualify for a loan. Stricter guidelines and qualifications may make getting a home loan more challenging, so potential home buyers should work with a mortgage specialist to determine their ability to buy a home.
The National Association of Home Builders (NAHB) and Wells Fargo Housing Opportunity Index (HOI) report that nearly 76% of new and existing homes sold in the last quarter of 2011 could have easily been purchased by buyers earning $64,200 (the national median income). The previous quarter showed nearly 73% of homes in that range, marking a 3% increase.
Interest rates have been at record lows and change weekly on 30-year loans with Freddie Mac reporting an average of 3.87% on February 16th. 15-year loans were averaging 3.16%. Many housing markets were considered affordable in the recent index, however, if you are in market to purchase a Santa Cruz home, here is the following information for the Santa Cruz area:
- The median list price in APTOS, CA 95003 this week is $664,000. With the single family home inventory up and Market Action trending down recently, it is a strong buyer’s market. While days-on-market appears to be trending lower, the overall conditions are weakening a bit. The Market Action Index has been trending lower for several weeks while prices have remained relatively stable.
- The median list price in CAPITOLA, CA 95010 this week is $764,000. Recently prices in this zip have settled at a plateau even though they dipped this week. A Market Action Index of 14 indicates a strong buyer’s market.
- The median list price in SANTA CRUZ, CA 95062 this week is $560,000. Santa Cruz Home sales have been exceeding new inventory for several weeks. Since this is a Buyer’s market prices are not yet moving higher as excess inventory is consumed. However, as the supply and demand trends continue, the market moves into the Seller’s zone, and we are likely to see upward pressure on pricing.
Click on The NAHB/Wells Fargo Housing Opportunity Index: History of Least and Most Affordable Areas spreadsheet located here to download the list of historical data on the most and least affordable areas in your community or browse their website to learn more.