“Are home prices in St. George becoming unaffordable, and do you think the housing market will crash?” We get asked this all the time. Today we’ll answer these questions and provide you with some supporting data.

Home prices have certainly increased over the last two years. However, there’s solid data to support why home prices are still strong. The mortgage industry is much different than it used to be. Mortgages have changed quite a bit since 2005. Back then, people were getting mortgages they shouldn’t have been able to qualify for.

They had loan programs called “stated income” or “stated assets.” Basically, if you had a pulse and could tell the mortgage company how much money you made and how much you had in the bank, they’d give you a mortgage for a house that you probably couldn’t afford the monthly payment on. That is no longer happening, and it hasn’t happened since 2010. Anybody getting a mortgage now has to document that they have the monthly income to support what that house payment is.

“Mortgages have changed quite a bit since 2005.”

At 1:29 in the video, you can see a graph of housing affordability since 1980. The median mortgage payment with current interest rates is about $1,468. In 2020, it was about $1,311. 2015’s price was very close to what it is today. However, homes in 2015 cost about $77,000 less. The reason our prices today can be so much higher with the same affordability is that our interest rates are lower.

2010 was the most affordable time to own a home since 1980 because that was right after the market crashed and home prices were insanely low. Ever since then, we’ve had a decline in the inventory, which has raised prices. Despite this jump in prices, homes are still extremely affordable today because of our low interest rates.

We hope this provides some insight into what we might see in the market. If you have questions about the market or affordability, or if there’s anything we can do for you, don’t hesitate to reach out to us via phone, text, or email. We’d love to be your resource.

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