There is a lot of talk about inflation right now. We notice it when we fill up our gas tank or go to the
grocery store. Inflation can also be seen when looking at the affordability of our housing.
Home Affordability Jacksonville Beach
As the graph below illustrates, the median price of a single-family home in NE Florida has skyrocketed
over the last 4 years from $274,600 in 2019 to a current median in 2022 of $398,500. That’s an increase
of $123,900. The increase is not in the purchase price alone but also in the mortgage rate that will
impact your monthly payment amount. Mortgage rates have fluctuated over the last 4 years from as
low as 2.92% and are now up to 5.65% or more. Home Affordability Jacksonville Beach is going down.
Unfortunately, as the purchase price of homes and the accompanying mortgage rates have risen, the
median family income has not increased at the same rate. In 2019 the median family income in NE
Florida was at $80,944 and now, in 2022, it is $88,250.
The disparity between the quick rate of increasing home prices and mortgage rates, to the much slower
rate of increasing family incomes is what accounts for the decreasing affordability of housing.
The simplest way to notice this trend is in the percentage of a family’s income that is being spent on
their mortgage payment. In 2019, 15.6% was the median percentage of income spent on mortgage
payments, down to 14.7% in 2020 and now currently up to 25%.
How to assess your own ability to afford a home.
When you’re applying for a mortgage loan the bank will look at your debt-to-income ratio (DTI). A bank
will most likely not approve a loan in a case where the family’s gross income is less than 50% of their
total debt. A bank prefers to see a DTI of no more than 45-50%. In some cases, borrowers can apply for
an FHA Mortgage which allows for a DTI above 50% but not more than 54%.
For example, say a family earns $85,000/ year in gross income. The family’s debts include a $15,000 car
loan and a $22,000 student loan for a total of $37,000 in debt. This family would have a 40% DTI.
Decreasing home affordability is a challenging part of buying a home right now. Fluid Realty is here to
help you assess what you can afford and find a home that fits your budget. Reach out to us to get
started!
