More renters qualify to purchase Bedford real estate, incomes grow as prices fall | Finding your Bedford NY Home

NAR sees many reasons to purchase a home in Bedford NY.  Here is the list.

• Many factors have increased the number of renter households qualified to purchase a home in 2010 versus 2005: 1) incomes have increased, 2) population has grown, 3) prices have fallen, and 4) mortgage rates are lower.
• Incomes have increased.  For example, 25 percent of renter households earned more than $50,000 in 2005.  In 2009, the share had increased to 28 percent of renter households.
• Population has also grown.  In 2005 there were approximately 36.8 million renter households compared to 38.8 million renter households in 2009[1].
• The tables below show the data underlying the change in required income.  Because of lower home prices and mortgage rates, qualifying income required to purchase a median priced home has fallen from $56,600 in 2005 to $40,300 in 2010.

• Finally, based on all of these factors, we see that while 21 percent of renters qualified to buy the median priced home in 2005, 39 percent of renters would qualify in 2010[2].  Translating these numbers into households, 7.7 million renters qualified to purchase the median priced home in 2005 while in 2010, 15 million renter households qualify[3].

• If you’re interested in exploring how much of an affect changing prices, mortgage rates, and down payments have on the number of renters who qualify to buy a home, download this tool.  It allows you to adjust the home price, mortgage rate, and down payment percent to see how those changes affect the share and number of renters qualified to buy a home.
• Have interest in seeing how these factors affect affordability in your state or metro area?  Contact NAR Research for more information on constructing a tool with income and population data that is specific to your area.

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[1]The number of renter households used here is derived from the American Community Survey which is consistent with the rest of the data used in this study. The ACS is not the official source of US population figures. For more information, see: http://www.census.gov/acs/www/guidance_for_data_users/guidance_main/.
[2] This calculation assumes that income distribution in 2010 is the same as it was in 2009.
[3] These calculations assume that potential buyers meet credit qualifications and have sufficient cash on hand to close a transaction.  Lending standards, credit quality, and access to funds will affect the number of households who will be able to buy a home.

from Economists\' Outlook by Danielle Hale, Research Economist

This article is the second in a series.  The first article can be found here.

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