With home prices at their lowest in a decade and mortgage rates at historic lows, one would thing buying a home now would be significantly cheaper than it was five years ago. Not so, says a new study.
Nick Timiraos digs into the findings of the study [PDF], authored by Andrew Davidson and Alexander Levin of mortgage consulting firm Andrew Davidson & Co, which looks at the full financing package associated with buying a home, and finds that, "the total cost of homeownership, as a share of a borrower's income, is the same today as it was during the height of the housing mania."
Timiraos describes the reason: "borrowers have to put more money down to get a loan, and the exotic lending products that allowed borrowers to make low initial payments have gone away. That means while the absolute monthly payments are lower, the all-in costs of homeownership haven't become more favorable."
"The erosion of down-payment requirements from 2000 to 2006 reduced borrower costs by around 15%, according to Messrs. Davidson and Levin, while tighter down-payment standards since 2006 have raised borrower costs by 22%. That more than offsets the benefit of a drop in interest rates from around 6% to less than 4%."
Read the full story: Why Housing Affordability Is a Mirage
Home Prices are Stabilizing. Will it Last?
Housing costs are growing at a slower rate than in recent years, but experts say significant home price reductions won’t happen in the short term.
Million-Dollar Homes Becoming Standard Fare Across Los Angeles
As households with means seek to escape crowded apartment buildings and take advantage of historically low mortgage rates, average home prices of over $1 million are proliferating across the LA region.
Just 17% of San Diego households can afford the city's $1M+ median home prices
The city is becoming increasingly unaffordable to prospective homebuyers.
Planetizen Federal Action Tracker
A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.
‘Going backwards:’ Baltimore mayor, students rally against state's transit funding plan
Maryland's proposed six-year plan provides no funding for Baltimore’s BMORE bus program and reduces its road maintenance funding.
Detroit to transform waterfront with $2.2 billion investment
Developers will convert about 18 acres of unused parking lot space into civic spaces.
Data center developers are using lawsuits, cash offers to ‘overwhelm’ rural America
Newsrooms in five states worked together to uncover the tactics big tech developers use to buy land from reluctant communities.
U.S.-Iran war may have ‘devastating’ impact on cost to warm homes
Vermont and Maine residents may see a 76% increase in the cost of warming their homes this winter.
Senate bill would ‘overhaul’ environmental permitting laws
Under the proposed act, government agencies would also not be able to suspend or rescind permits after granting them.
FREE Course: Walkable City 1: Why Walkability?
After describing his path towards focusing on walkability as the essence of good planning, Jeff Speck marches through his five principal reasons for making more walkable places.
Reinventing Malls: Planning Alchemy—Turning Gray Fields Into Gold
The course focuses on the opportunities and imperatives that shape reinvention of mall sites.
One Hundred Miles
County of Mendocino
planning NEXT
The Architects Foundation
University of Cincinnati Online
Montrose County
Northern Illinois Transit Authority (NITA)
The Pocatello Development Authority