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Cari’s Believe It or Not: Home Prices are Up but They’re More Affordable, Too

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Even as home prices have risen, homes are more affordable. How’s that even possible? Follow me on this as you read below. Logically, it makes no sense … but the numbers don’t lie.

You know home prices are up in the Tri-Cities. We’ve been repeating that on a regular basis here. They’re also up across the country. CoreLogic is projecting home prices to rise this year in all 50 states.

But you know what’s changing just as much — if not more — than home prices?

Mortgage rates! They’re at the lowest rates in years, and Freddie Mac says they’re not far off from all-time lows.

Mortgage rates are down by almost a full percentage point since this time last year. Interest rates have fallen so much that homes are more affordable despite having a higher price tag. Here’s how the real estate analytics firm Black Knight explains it:

Despite the average home price increasing by nearly $13,000 from just over a year ago, the monthly mortgage payment required to buy that same home has actually dropped by 10% over that same span due to falling interest rates.

Put another way, buying power for those shopping for the average-priced home has increased by 16% (approximately $48,000) in just over a year’s time.

Isn’t that fascinating?!? And adding to home affordability is the fact that the median family income in the US was up 5% last year.

I guess the moral of the story is that buyers don’t need to be turned off by all the times we talk about home prices going up. Instead, take a look at how low mortgage rates are falling and keep in mind that your local lender may be able to help you get a lower payment even as home prices rise.

As always, if you have questions about the home buying aspects of all this, call, text or email us anytime. And if you have questions about financing and what you can afford, we’ll be happy to put you in touch with a couple of the excellent lenders we have in the Tri-Cities.

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About The Author
Cari McGee

My husband and I came to the Tri-Cities in 1994, and we thought it would be a temporary stop on our way to larger cities. He was a television sports anchor at the time, and we planned to go wherever the "next step up" took us. Twenty-plus years later, we're still here and we've loved every minute of it! We have two children now, and we've found the Tri-Cities area is a wonderful place to raise a family. It's a great place to do outdoorsy things -- I like to hike Badger Mountain or run along the river path. I also love reading ... by a cozy fire in the winter or a beautiful picture window in the summer (with the A/C on!). I've been a licensed Realtor since 2004. I earned my managing broker's license in 2016, which means I can run my own brokerage, or create a team of real estate agents and supervise them, which is exactly what I did when I formed the Cari McGee Real Estate Team in 2018! We have administrative and marketing personnel, as well as additional agents to serve you. I became a director of the Tri-Cities Association of Realtors Board of Directors in 2016, became Secretary/Treasurer of the organization, and was elected to Vice President in 2019. Want to talk about real estate? Click here to schedule a meeting with me!

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