Even with home prices marching ever upward and mortgage rates bouncing back more than a full percentage point over last year, Capital Economics’ Paul Diggle insists housing affordability is still as good as most other experts say it is—if not better. Explaining that affordability measures “the burden of mortgage payments relative to income,” Diggle notes that the latest data from the National Association of Realtors shows that a family earning the median income has 178 percent of the income necessary to qualify for a mortgage on a median-priced home. At the same time, typical mortgage payments currently average 17 percent of median income, up from recent months but below the long-run average of 22 percent. In the firm’s latest US Housing Market Focus, Diggle notes that long-term trends show prices are up 15 percent below their trend level, with the ratio of Case-Shiller prices to disposal incomes per capital pointing to housing being about 16 percent below fair value. However, when comparing median household income to median home prices, Diggle says housing looks “no better than fairly valued.”
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If you’ve got several leads waiting to turn into potential deals, you can’t wait for one to suddenly come knocking at your door. Successful real estate house flippers have one trait in common: they place an emphasis on proper planning. Once you’ve secured a deal, you must decide what kind of rehab you will perform. Will you conduct a few simple cosmetic upgrades (like these 10 rehab projects you finish in one weekend )? Or, is the home nice enough to sell after an easy prehab ? Are there structural damages that will require you to carry out more major renovations? Will you focus on implementing environmentally friendly renovations – also known as “greenhabbing” – so that you qualify for certain tax benefits ? Once you’ve determined your strategy, it is important to ask yourself these specific questions before diving into the construction action: What are the current market conditions in my area? What does my ideal buyer look like? Does my marketing cam...