Investment, Property

Finally some good news for house hunters!

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Finally some good news for house hunters!

It is a rare occasion that income rises faster than property prices but low and behold a report from Zillow suggests that this has happened for the first time since 2011.

Median house prices reached $188,100 in August 2016, that’s a 5% increase since August 2015. Last week the Census Bureau reported that median house hold income increased to $56,516 in 2015.

This gives monthly cash injection gives households the opportunity to save for a down payment or have the ability to spend more on the monthly mortgage payment.

Considering this is the first wage increase since 2007, wages still have a long way to go to catch up with house prices. House prices started to rise in 2012 due to steady demand and a dwindling supply has caused price hikes nationwide.

After the chaos of the 2008 housing crisis, banks have implemented stringent lending standards including a firm stance on down payment requirements. The safe rule of thumb is the higher the house price, the larger the down payment which is a challenge for the average potential buyer.

Mortgage rates are still near record lows which does help with the woes of borrowing to purchase properties. According to Freddie Mac the average rate of a 30 year fixed mortgage is 3.48%, one year ago the rate was 3.86%. House price appreciation is slowing nationwide bar a few key areas. Some parts of the U.S have experienced price appreciation with double digits! House prices in Portland, Oregon have risen nearly 15% on a year to year basis.

The overall calming on prices are starting to have a positive price effect on renters too. When house prices started to rise more potential home buyers was forced towards the rental market, this caused rental prices to sharply increase. Currently rental prices are increasing on a national scale, according to Zillow it’s a 1.7%. In 2015, rents were rising by more than 6%.

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Tags:

national House prices stabilizing, house supply issues, wage increase