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Rockford housing market third most affordable in the U.S.
Posted By Brandon Reid On August 15, 2012 @ 2:52 pm In Happening Now, Local News | No Comments
Online Staff Report
The median home price as a percentage of median annual income ranks Rockford as the third most affordable housing market in the country.
According to Fiserv, a technology provider to the financial industry, first-quarter 2012 home prices show Rockford area homebuyers are getting quite the bargain, one of nine markets in the Midwest that made the list.
Looking at the percentage of monthly income that goes to mortgage payments for homes, Rockford had a 132 percent ratio, ranking it third. The report shows a median home price at $80,000 (the fifth lowest) and median family income of $60,000. Rockford Area Realtors show that the median home price is significantly rising — from $74,950 in January to $99,950 in July.
Fiserv estimates Rockford median home prices are only expected to rise by 2.4 percent in 2013, less than the 5 percent price increase expected nationally. However, between 2012 and 2017, local home prices are expected to grow at an annualized rate of 4.2 percent, besting the U.S. rate of 3.9 percent — some 7 percent better.
“We’re very excited about this news,” said Steve Bois, CEO of Rockford Area Realtors. “This continues a historical trend of Rockford ranking in the top 10 markets for housing affordability.”
He added, “These new statistics show us that locally people can afford buying a house more easily than other locations around the country, very positive news for prospective local homebuyers.”
Bois said low interest rates are another critical factor in making houses more affordable. Real estate website Zillow showed the average 30-year fixed-rate mortgage dropped to 3.42 percent this week. The rate’s all-time low of 3.34 percent was recorded last month.
Bois said this is still a buyer’s market with the bargain basement pricing opportunities changing.
“Pricing in the Rockford real estate market is determined by supply and demand,” Bois said. “With the local housing inventory starting to decline and the time it takes to sell a home falling, this will put upward pressure on home prices.”
Bois said that currently in certain categories of homes, prices are significantly higher than the market average.
Another factor that could drive up prices is the local economy, particularly the manufacturing sector. According to the Federal Reserve, manufacturing has been growing the past 36 months at an average of 6.2 percent.
Manufacturing capacity utilization has been rising since June 2009, closing in on 79 percent to 89 percent, close to full utilization, which then leads to manufacturing plant expansion.
Industrial production is forecast to continue to rise at a solid rate — 3.5 percent this year and 3 percent next year.
The top 10 housing markets in terms of affordability are as follow:
2. South Bend, Ind.
4. Warren-Troy-Farmington Hills, Mich.
5. Memphis, Tenn.
6. Monroe, Mich.
7. Youngstown-Warren-Boardman, Ohio-Pa.
8. Battle Creek, Mich.
9. Appleton, Wis.
10. Lansing, Mich.
Posted Aug. 15, 2012
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