House-Buying Power at Near-Historic Levels

We keep hearing that home affordability is approaching crisis levels. While this may be true in a few metros across the country, Columbia South Carolina housing affordability is not a challenge. In their most recent Real House Price Index, First American reported that consumer “house-buying power” is at “near-historic levels.”

Their index is based on three components:

1. Median Household Income
2. Mortgage Interest Rates
3. Home Prices

The report explains:

“Changing incomes and interest rates either increase or decrease consumer house-buying power or affordability. When incomes rise and/or mortgage rates fall, consumer house-buying power increases.”

  Columbia South Carolina housing is 75% lower than the national average, Showing that affordable housing is not a challenge.

Bottom Line

Even though home prices are increasing rapidly across the nation, and are now close to the values last seen a decade ago, the actual affordability of a home in Columbia South Carolina is much better now.

Here is a graph comparing First American’s consumer house-buying power (blue area) to the actual median home price that year from the National Association of Realtors (yellow line).