Housing Affordability

The stats are in, over the past year home prices in Arizona have jumped a record 22.7%. The Arizona housing market is hotter than Phoenix’s July temperatures. Nationally the average appreciation was 13%. With prices increasing so much, the question is: Can new buyers afford these higher prices?

To answer this question, we must look at today’s numbers as comparted to the market in 2006 (just before prices dropped):

 

2006 By the Numbers

Average Purchase Price:  $251,922

Median Income:  $48,568

Average Mortgage Payment:  $1,298

2021 By the Numbers

Average Purchase Price:  $375,000

Median Income:  $79,900

Average Mortgage Payment:  $1,843

 

As you can see, the average purchase price and mortgage payment increased over the last 15 years. But more importantly, so did median income.

You are considered house poor if your housing payment exceeds 28% of your Gross Income. Looking at these numbers, in 2006 the housing ratio was 31.4% (House Poor). In 2021, the housing ratio is 27.3% (House OK!).

By the numbers, though prices have increased at record pace, they are in line with the increase in household income. This shows that home ownership is still very affordable and most likely prices will continue to increase along with wages.

by:

Ryan Gilliam
Waterstone Mortgage
3489 E. Baseline Rd
Gilbert, AZ 85234
Phone:  480-635-3035
E-mail:  rgilliam@waterstonemortgage.com

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