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    Despite Years of Skyrocketing Prices, It’s a Good Time To Buy a Home, Report Finds

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    Much has changed since the lows of the Great Recession and its immediate aftermath: The economy is booming, unemployment is low—and home prices have shot up in many parts of the country.

    And despite the last few years of high prices, it’s a good time to buy a home, according to a recent report from the online financial services marketplace LendingTree.

    Mortgage interest rates, the number of foreclosures, and the amount of income buyers are spending on their mortgage payments all fell from 2010 through 2019. That’s a win for buyers.

    “If you are in a point in your life where you’re considering buying a home today, it’s a better time to buy than 10 years ago,” says LendingTree’s chief economist, Tendayi Kapfidze

    “If you can get a mortgage, you’re getting much lower interest rates, and it enables you to afford more. But that also means that you’re competing with more buyers, who are bidding up the prices.”

    That’s good news for aspiring homeowners contending with steep price increases. Nationally, median sales prices surged 53.5% between early 2012 and summer 2019, according to a realtor.com® analysis of sales data.

    Those high prices were at least partially offset by the decline of the average mortgage rate by more than a percentage point from the beginning of the decade to its close, according to the LendingTree report. Rates fell from 5.09% to 3.74% over that period for 30-year, fixed-rate loans.

    While a drop of a few percentage points may not sound like much, it represents hundreds of dollars a year and tens of thousands of dollars over the life of a loan, depending on the amount borrowed.

    That may help to explain why buyers are spending less of their annual household income on their mortgage, according to LendingTree.

    “The great news is that people that do own a home are much healthier financially than they were 10 years ago,” says Kapfidze. “One reason is because of low mortgage rates. If you refinance, [you can] reduce your monthly mortgage payments.”

    In addition, homeowners have a lot more equity. The total nationwide hit a low of $8.2 trillion in 2012, but the figure has since rebounded and then some, to $18.7 trillion in 2019.

    With all that equity, fewer folks are underwater on their mortgages—so the foreclosure crisis that resulted in scores of vacant homes throughout the nation has effectively ended.

    After the housing bubble burst, though, it’s become harder for folks with poor credit to get a mortgage. So that means that borrowers who do get a loan are more likely to be able to pay it back.

    Just 2.45% of borrowers were delinquent on their mortgages—compared with 11.5% in 2010.

    That’s a big deal even for folks who are current on their payments. Too many foreclosures in a given area can lead to a decline in property values for everyone.

    The post Despite Years of Skyrocketing Prices, It’s a Good Time To Buy a Home, Report Finds appeared first on Real Estate News & Insights | realtor.com®.

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