After finishing second in 2013, the Twin Cities has been ranked the most affordable city in the country for home ownership, according to Interest.com. The site analyzed the 25 largest US metros to see how their median household incomes compared to the area’s median priced homes.
As reported in the Star Tribune, Minneapolis-St. Paul’s median household income is $67,000 – almost $15,000 higher than the national median income. By their math, Interest.com determined that the median income of Twin Cities residents is 23 percent greater than the wage requirements for buying a median priced home in our area, which was cited at $213,000. Homeowner’s insurance rates and median property taxes were also taken into account when giving our market the top ranking.
We love being number one, but it’s important to see what high home affordability could mean for today’s buyers.
Rising inventory means more to choose from
The 13-county metro area saw an 18 percent year-over-year increase in traditional inventory in October. Meanwhile, pending sales slipped slightly, down 1 percent from last year. Both of these are signs that the market is still moving away from a sellers’ market and into a balanced market that allows for both buyers and sellers to benefit.
Mortgage rates remain low for buyers
Defying expert predictions, mortgage rates are still low heading into the holidays. Nothing is more important – or more fickle – than a rising loan rate when buying a home. Here’s why locking in a low interest rate is so important: If a buyer with a 20 percent down payment is approved at 4 percent on a 30-year fixed conforming loan, for a $350,000 house in Apple Valley, their monthly mortgage payment would be around $1,500.
Meanwhile, if that buyer’s loan interest rate increased just .5 percent, the monthly mortgage payment would be a little over $1,700. That’s an additional $2,400 annually, and a difference of $72,000 over the 30-year life of the loan.
Your lender will give you your estimated interest rate (assuming rates hold) and your estimated loan amount during the pre-approval process. Just remember – the lower your interest rate, the more home you can afford.
A strong local economy gives an extra boost
It’s not just a high median household income that makes the Twin Cities stand out. Our strong local economy also boasts an unemployment rate of 3.6 percent, which is the lowest in the country according to the Bureau of Labor Statistics. Job security and a strong employment portfolio go a long way when applying for a loan in today’s market.
If you’re thinking about buying a home, consider starting the process now. Buying a home at this time of year means less buyer competition and you’ll take advantage of today’s low interest rates. Go ahead – call, email or live chat us now to get started on buying a home in the most affordable housing market in the country.
