The COST of Your Next Home Will Be LESS Than Your Parents’ Home Was

There is no doubt that the price of a home in most regions of the country is greater now than at any time in history. However, when we look at the cost of a home, it is cheaper to own today than it has been historically.

The Difference Between PRICE and COST

The price of a home is the dollar amount you and the seller agree to at the time of purchase. The cost of a home is the monthly expense you pay for your mortgage payment.

To accurately compare costs in different time periods, we must look at home prices, mortgage rates, and wages during each period. Home prices were less expensive years ago, but paychecks were also smaller and mortgage rates were much higher (the average mortgage interest rate in 1988 was 10.34%).

The best way to measure the COST of a home is to determine what percentage of income is necessary to buy a home at the time. That would take into account the price of the home, the mortgage interest rate and wages at the time.

Zillow just released research that examined home costs using this formula. The research compares the historic percentage of income necessary to afford a mortgage to the percentage needed today. It also revealed the cost if mortgage rates continue to rise as experts are predicting. Here is a graph of their findings*:

The COST of Your Next Home Will Be LESS Than Your Parents' Home Was | MyKCM

Rates would need to jump to 7% in order for the percentage of necessary income to be greater than historic norms.

Bottom Line

Whether you are a homeowner considering selling your current house and moving up to the home of your dreams, or a first-time buyer trying to purchase your first home, it’s a great time to move forward.

*Assumptions in the Zillow report: Buyer puts 20% down, takes out a conforming, 30-year fixed-rate mortgage at rates prevailing at the time, earns the median household income, and is buying a median-valued home.

Yaron Kaminski

Yaron Kaminski –

That headline might be a little aggressive; however, as August 2017’s housing market data begins to roll in, we can definitely say one thing: If you are considering selling, IT IS TIME TO LIST YOUR HOME TODAY!

In a recent article by CBS News, they explained that the number of existing home sales is shrinking, and Lawrence Yun, Chief Economist for the National Association of Realtors, said:

“There should be 3 million homes on the market right now…Yet, there are only 1.9 million.”

And this situation will be affected greatly by recent natural disasters. Yun continued by saying:

“Before the hurricanes I would have predicted 1.35 million in new-home construction in 2018…I’ll have to scale that down now.”

NAR, in their August 2017 Realtors® Confidence Index, indicated that:

“Amid sustained job creation and sustained historically low mortgage rates, REALTORS® reported…that buyer demand is stronger compared to conditions one year ago… and that fifty percent of properties were on the market for less than one month when sold.”

The only challenge to today’s market is a severe lack of inventory. A balanced market would have a full six-month supply of homes for sale. Currently, there is only a 4.2-month supply of inventory, which is down from 4.5 months one year ago.

Bottom Line

With demand increasing and supply dropping, this may be the perfect time to get the best price for your home. Let’s get together and discuss the inventory levels in your neighborhood to determine your next steps.

Yaron Kaminski             Remax Advantage Realty

5813 RICHARDS VALLEY ROAD, ELLICOTT CITY, MD

5813 RICHARDS VALLEY ROAD, ELLICOTT CITY, MD

For Sale

$ Click for current price
4 BEDROOMS | 4 (3 full, 1 half ) BATHROOMS | 2036 SQUARE FEET

Property Description

Luxurious End Unit, Town Home in beautiful Shipley’s Grant Community. The floor plan encompasses four spacious bedrooms three & half gorgeous bathrooms with marble. A sleek and stylish kitchen featuring breakfast bar w/ angled island, Granite, soft close cabinets, oversized pantry and serving area adjacent to the Dining Room. Garage set up for entertaining space if wanted.



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5813 RICHARDS VALLEY ROAD, ELLICOTT CITY, MD – Just Listed

5813 RICHARDS VALLEY ROAD, ELLICOTT CITY, MD

Just Listed

$ Click for current price
4 BEDROOMS | 4 (3 full, 1 half ) BATHROOMS | 2036 SQUARE FEET

Property Description

Luxurious End Unit, Town Home in beautiful Shipley’s Grant Community. The floor plan encompasses four spacious bedrooms three & half gorgeous bathrooms with marble. A sleek and stylish kitchen featuring breakfast bar w/ angled island, Granite, soft close cabinets, oversized pantry and serving area adjacent to the Dining Room. Garage set up for entertaining space if wanted.



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5813 Richards Valley Road, Ellicott City, Maryland

5813 Richards Valley Road, Ellicott City, Maryland

For Sale

$ Click for current price
4 BEDROOMS | 4 (3 full, 1 half ) BATHROOMS | 2036 SQUARE FEET

Property Description

Luxurious End-Unit Town Home in charming Shipley’s Grant community.  The extra windows lighten up the gorgeous & cozy living room as well as the rest of this spectacular home.  Enjoy the walking & biking trails, tot lots and community pool, clubhouse & fire pit.  Prime shopping, fine dining and favorite coffee shop just down the street.

The floor plan encompasses four spacious bedrooms, three & half gorgeous bathrooms with marble.  A sleek and stylish kitchen featuring breakfast bar with angled island, Granite, soft close cabinets, oversized pantry and serving area adjacent to the Dining Room.



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5813 Richards Valley Road, Ellicott City, Maryland

5813 Richards Valley Road, Ellicott City, Maryland

For Sale

$ Click for current price
4 BEDROOMS | 4 (3 full, 1 half ) BATHROOMS | 2036 SQUARE FEET

Property Description

Luxurious End-Unit Town Home in charming Shipley’s Grant community.  The extra windows lighten up the gorgeous & cozy living room as well as the rest of this spectacular home.  Enjoy the walking & biking trails, tot lots and community pool, clubhouse & fire pit.  Prime shopping, fine dining and favorite coffee shop just down the street.

The floor plan encompasses four spacious bedrooms, three & half gorgeous bathrooms with marble.  A sleek and stylish kitchen featuring breakfast bar with angled island, Granite, soft close cabinets, oversized pantry and serving area adjacent to the Dining Room.



Logo

 

5813 Richards Valley Road Ellicott City MD 21043

5813 Richards Valley Road Ellicott City MD 21043

Gorgeous townhouse, built in 2010.  Luxurious End-Unit Town Home in charming Shipley’s Grant community. The extra windows lighten up the gorgeous & cozy living room as well as the rest of this spectacular home. The floor plan encompasses four spacious bedrooms, three & half gorgeous bathrooms with marble. A sleek and stylish kitchen featuring breakfast bar with angled island, Granite, soft close cabinets, oversized pantry and serving area adjacent to the Dining Room.

Enjoy the walking & biking trails, tot lots and community pool, clubhouse & fire pit. Prime shopping, fine dining and favorite coffee shop just down the street.

Visit this link to see pictures, video and more.

5813 Richards Valley Road, Ellicott City, Maryland – Coming Soon

5813 Richards Valley Road, Ellicott City, Maryland

Coming Soon

$ Click for current price
4 BEDROOMS | 4 (3 full, 1 half ) BATHROOMS | 2036 SQUARE FEET