Grand Rapids Makes #1 List Again
Hello everyone. Kevin Yoder here with Yoder Real Estate and KevinYoder.TV, back with a crazy announcement. So Grand Rapids, Michigan, number one in the United States of America for first time home buyers. I have an article pulled up. I’ll give you some insights. I won’t go deep into the stats. That’s the boring stuff. Let’s just give you the highlights, the high level, what you need to know about this and what it means to you, especially you home buyers. It does impact the home sellers, of course, but mostly today, we’re talking to those of you who are on the sidelines and you’re thinking about buying a home. What does this article mean to you? Number one, Grand Rapids, Michigan, and by the way, we’ve always been in that top affordability index, which simply means our income levels in Grand Rapids, Michigan relative to the cost of owning a home has always been in the top, believe it or not, one or two spots for a very long time.
So how did this come about? They’re measuring the metrics with four categories. One is home market favorability. So it’s the price to rent ratio. So basically price to rent ratio, it’s just the affordability. In other words, renting is going to be sometimes equal or more than it would cost to own a home. Number two, affordability. This is down payment income housing costs as a percentage of income and effective property. That’s that affordability index that I shared with you. Livability, so dining, entertainment nearby, and finally unemployment, so all those factors. Now, we factor in the low interest rates as well. If you don’t have a friend in the mortgage industry, and most people do, you know that they’re running crazy right now with refinances. There’s a reason for that. Interest rates are super low.
renting is going to be sometimes equal or more than it would cost to own a home.
So to the first time home buyer, everything’s about perspective. To say interest rates are low might mean nothing to you unless you knew how low they really were. So we’re talking about interest rates around 3% or sub 3%. That’s only low compared to what? Relative to 18%. There was a time not too long ago that interest rates were 18%, but more recently fives and sixes in the last decade or so. So 3%, super low. Our interest rates are going to impact the price of the home beyond other factors, such as pricing. So if the home price goes up by $10,000, for example, that’s going to have less of an impact on the price, the monthly payment, which is what most people are concerned with. The interest rate is going to have more of an impact on that than the home price going up.
So remember that when we’re thinking about, is it the good time to buy. Consider everything that you have in place. Do you have an ample down payment? Do you have money in reserves? Not everybody should buy a home, by the way. And all the other things that you would factor in. Interest rates are super low so affordability is key. And if your monthly payment is going to be lower as a result of that, then it might be time to take action on it. If your lease is up and you’ve been waiting on the sidelines, to wait would mean to capture the price of tomorrow for that home. So the home price goes up next year in 2021 and the interest rate goes up. Not saying that’s going to happen. It’s just if it does, then you’re actually getting hit twice on that.
Kevin Yoder:
So something to keep in mind. If you want to know more about what this looks like for you and your individual situation, just know that Grand Rapids, Michigan, again, is being featured in the news for the one of the most affordable places to live in the country. I want to highlight this one today because we still hear people, believe it or not, that they’re going to wait because home prices are crazy. Well, crazy is a subjective term. Crazy compared to what, your Aunt Milda? But remember, they’re not crazy. All things relative, we’re the number one place for first-time home buyers in the country. So not crazy, really good. Give us a call if you have any more questions. We are here to help and we can help dissect this article for you. I’ll put a link below. You can read the whole thing if you are so inclined to do so. And then we’re here to help you. Kevin Yoder, Yoder Real Estate. You can find us online, of course, at yoderrealestate.com, and we’ll see you next time.
Kevin
Grand Rapids is No. 1 city in America for first-time home buyers, report says
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