Is It Getting More Affordable To Buy a Home?

This past year, many Kansas City buyers have shared with the Just Say Home real estate team about the difficulty of purchasing a home in today's market. While it's clear that affordability is still tight, current housing data trends show signs of improvement that could continue throughout the year. Elijah de la Campa, Senior Economist at Redfin, says:

"We're slowly climbing our way out of an affordability hole, but we have a long way to go. Rates have come down from their peak and are expected to fall again by the end of the year, which should make homebuying a little more affordable and incentivize buyers to come off the sidelines."

Let's look at three significant factors that affect KC home affordability—mortgage rates, home prices, and wages—and how these trends could improve affordability for you this year.

Mortgage Rates

National mortgage rates have been volatile this year, bouncing around in the high 6% to low 7% range. These numbers are still quite a bit higher compared to a few years ago, but there is a sliver of good news.

Despite this recent volatility, KC mortgage rates are still below last fall's numbers at nearly 8%. In addition, most national real estate analysts think rates will continue to decrease over the course of the year. A recent article from Bright MLS explains:

"Expect rates to come down in the second half of 2024 but remain above 6% this year. Even a modest drop in rates will bring both more buyers and more sellers into the market." 

What does this mean for you as a KC homebuyer? Any decline in rates can make a significant difference. As mortgage rates drop, home affordability improves. This rate change could mean a lower monthly payment on that house you've been wanting.

Home Prices

The second key factor to consider is Kansas City home prices. Most housing market specialists project they'll keep increasing this year at a more normal pace. There is an increase in homes listed on the current housing market, but still not enough to meet KC buyer demand. The graph below shows the latest 2024 home price forecasts from seven different organizations:


These forecasts are good news! KC home prices aren't likely to shoot sky-high like they did during the pandemic. While prices aren't expected to fall any time soon, we'll see them rise at a slower pace.


Wages are increasing across the country and this is powerfully impacting affordability for many Kansas City homebuyers. Data from the Federal Reserve, shown by the graph below, reveals how wages have been growing over time:


The blue dotted line shows how wages typically rise. The right side of the graph indicates national wages are climbing even faster than normal right now.

How does this help you? As income increases, it's easier to afford a home in the Kansas City area. You don't have to put such a large percentage of your paycheck towards a monthly mortgage payment.

Bottom Line

The current trends of three significant housing factors—decreased mortgage rates, a slower increase of home prices, and growing wages—indicate better affordability for many Kansas City homebuyers through this year. Are you looking to buy a home in the Kansas City area? The Just Say Home real estate experts can clarify how these trends affect you and help you find a KC home that fits you perfectly.

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