Westchester County Real Estate Blog

Housing Affordability Conditions Fade in December

Compared to one year ago, affordability declined in December as the median family income rose by 4.5% while the monthly mortgage payment increased 22.5%. The effective 30-year fixed mortgage rate1 was 3.15% this December compared to 2.73% one year ago, and the median existing home sales price rose 16.1% from one year ago.

As of December 2021, the national and regional indices were all above 100, meaning that a family with the median income had more than the income required to afford a median-priced home. The income required to afford a mortgage, or the qualifying income, is the income needed so that mortgage payments on a 30-year fixed mortgage loan with 20% down payment account for 25% of family income. The Northeast was the second most unaffordable region with an index of 154.5 (median family income of $99,909 with a qualifying income of $64,656).

A home purchase was unaffordable for a typical first-time buyer intending...

69% of US Households are 'Priced Out'

Increase in house prices and interest rates have had a huge impact on housing affordability. According to the National Association of House Builders, latest estimates show that, nationally, 87.5 million households are currently unable to afford a median-priced ($412,505) new home.

A $1,000 increase in the price of that median-priced new home will further price 117,932 U.S. households out of the market. Based on their incomes and standard underwriting criteria, these households would be able to qualify for a mortgage to purchase the home before the price increase, but not afterward.

Builder Costs and Home Prices

A related issue is the difference between builder costs and the final price of a new home. When government-imposed...

Record-High Prices and Record-Low Inventory Make It Increasingly Difficult to Achieve Homeownership

The surging residential real estate market of the last two years led to record-high home prices and record-low inventory.

The Double Trouble of the Housing Market report examines the impact that rapidly escalating home prices and diminishing housing inventory has on housing affordability. Unlike previous affordability research and indices, NAR and Realtor.com® considered affordability for all income groups, accounted for the affordability of homes currently available for sale instead of homes that have already sold and provided affordability data by race for the 100 largest U.S. metro areas.

Nationally, more than 400,000 fewer affordable homes are available for sale for households earning $75,000...

Housing wealth is setting new records for both owners and sellers

The stunning jump in home values over the course of the Covid-19 pandemic has given U.S. homeowners record amounts of housing wealth. What they choose to do with it could have impacts on the broader economy. 

Annual home price gains averaged 15% in 2021, up from 6% in 2020, according to CoreLogic. Strong pandemic-driven demand, record low supply and record low mortgage rates conspired to create those hefty gains. Bidding wars are now the norm, and desperate buyers are competing with investors who want to cash in on the hot market. The upward trend is continuing, despite winter being historically the slowest season for housing.

While there were relatively few home sellers in 2021, for those who did list their homes, the returns were well worth it. The profit on a typical home sale last year was just over $94,000 according to ATTOM, a national property database. That is up 45% from the profit in 2020 and up 71% from pre-pandemic profits. And the vast majority of local housing...

7 Tax Benefits of Owning a Home: A Complete Guide for Filing This Year

You may recall the Tax Cuts and Jobs Act—the most substantial overhaul to the U.S. tax code in more than 30 years—went into effect on Jan. 1, 2018. The result was likely a big change to your taxes, especially the tax perks of homeownership. This revised tax code is still in effect today.

You may remember that in the past two years, the Internal Revenue Service delayed filing season by about two weeks due to COVID-19. But don’t look for extensions this year, as the date for filing is April 18, 2022. (According to the IRS, “The due date is April 18, instead of April 15, because of the Emancipation Day holiday in the District of Columbia for everyone except...

January '22: The Hottest Ever January for Housing

Homebuyers in the US are grappling with the hottest January on record, as 45% of homes now find a buyer within two weeks on the market. Thirty-five percent go under contract within a week. Both rates are the highest we’ve ever seen for this time of year.

Despite the market’s unprecedented intensity, pending home sales were down 1% during the four weeks ending January 23, the first year-over-year decline since June 2020. The stalling sales are not for a lack of buyers, but rather a lack of sellers.

Buyers who have been looking for a home since last year are tired of the search and just want to be done. Many sellers seem to be waiting until spring, so the inventory shortage is especially intesnse right now, leading to a renewed surge of bidding wars and buyers making offers that waive inspection and financing contingencies.

New listings fell 12%, the larest drop since June 2020, dragginf the total number of homes for sale to anoteher new low. Homeowners who are on the...

Sellers Had Much to Celebrate in 2021

A Year-End 2021 U.S. Home Sales Report, which shows that home sellers nationwide realized a profit of $94,092 on the typical sale in 2021, up 45 percent from $64,931 in 2020 and up 71 percent from $55,000 two years ago. Profits rose in more than 90 percent of housing markets with enough data to analyze and the latest figure, based on median purchase and resale prices, marked the highest level in the United States since at least 2008.

The $94,092 profit on the median-priced home sale in 2021 represented a 45.3 percent return on investment compared to the original purchase price, up from 33.6 percent last year and from 30.6 percent in 2019. The latest profit margin also stood out as the largest since at least 2008.

Both raw profits and ROI have improved nationwide for 10 straight years. Moreover, last year’s gain in ROI – up nearly 12 percentage points – was the biggest annual increase since 2013.

Profits shot up as the national median home price rose 16.9 percent...