Categories: ArmonkWestchester NY

Rates are low, prices stable — why is no one buying? | Armonk Real Estate

Motley Fool has a piece up from the weekend that caught HousingWire’s eye: “2 Simple Charts Prove That Now Is An Exceptional Time to Buy a Home.”

It caught our eye because it sounds like the kind of story we publish from time to time – our own story from just a month ago along these lines looks at the convergence of low mortgage rates and home prices with a slightly different twist. The Motley Fool writer starts strong enough:

If you’re wondering whether this summer is a smart time to buy a home, then let me cut to the chase. Thanks to still-historically low mortgage rates, housing may never again be as affordable as it is right now.

At present, the interest rate on a 30-year fixed rate mortgage is 4.19%. That’s the cheapest they’ve been all year, and they even recently dipped below half the long-run average of 8.52%.

Click below to see the chart.

Mortgage rates and home prices are two of the big drivers of home sales, after all. Motley Fool looks at these in terms of rates (ridiculously low) and home price affordability, which as measured by the National Association of Realtors, is “the degree to which a typical family can afford the monthly mortgage payments on a typical home.”

Click below to see the chart.

And by that NAR measure alone, homes are more affordable – but that’s just too broad a measure. It’s an empty measure, like the 77 cents on the dollar argument, that doesn’t fairly reflect reality.

But for the sake of argument, let’s say the NAR affordability index isn’t flawed.

Rates are low. According to Freddie Mac’s latest Primary Mortgage Market Survey, although rates edged slightly higher for the week ended June 12, they are still low for the year. The 30-year, fixed rate mortgage averaged 4.20%, up from 4.14% last week and 3.98% a year ago.