Affordability

"How much house can I afford?"

According to Google Trends this is the most searched question related to homebuying after interest rates.

By asking two simple questions and using some basic math we can create a starting point.

Question #1:  "What is your monthly budget for housing payment"?      

In today's rate environment the typical monthly payment will be approximately $850-$900 for every $100,000 borrowed for a single-family residence and no HOA.  

By taking the buyer's monthly budget and dividing it by .0085 that gives us a starting loan amount.

Question #2: "How much do you have or can you come up with for down payment?"

By adding this to the loan amount above we can derive at a purchase price.  

Example:

$3,500 budget / .0085 = $411,000

+ $25,000 down payment

= $436,000 Purchase Price

Many of today's potential buyers remain on the sidelines because they aren't aware of how affordable it really is in today's market. They incorrectly assume that "higher rates" or "a large down payment" is keeping them out of the game.