Weekly Special | February 1, 2021

You Won’t Like Future Home Affordability

Looking back over my 30 years of selling homes in Tallahassee, I feel like home prices have moved so much higher. I decided to prepare an analysis of what we should expect over the next 20 years, and today’s newsletter is just a small piece of the report (see FULL REPORT HERE).

The graph above forecasts future home prices (red) and the monthly mortgage payment buyers will get when buying these homes (solid blue). If you live with the hopes that the government will step in and keep mortgage interest rates low for the next 20 years, then you can just follow the blue dotted line.

Look at the solid blue line in the graph. Falling interest rates have kept mortgage payments (over the past ten years) at or lower than what people were paying in the 1990s. Do we really think this can last forever?

Look at home affordability today (yellow dashed line) and recognize why now is the best time to buy a home that you’ll likely encounter ever again. Historic low mortgage interest rates, coupled with the relatively low price of homes gives today’s buyer an advantage.

Even if you believe a market crash is in the future (near or far), do you really think we’ll see interest rates drop below 2.5% to counter it?

Survivors of 2006 will tell you no!

This issue went with a longer report on our blog: read the full blog post. The original one-page Weekly Special PDF is still available.