SAN MATEO, Calif.--(BUSINESS WIRE)--According to new data from Movoto.com, more than half of all American families can afford to buy a new home based on income levels and listing prices. Movoto.com’s user search statistics also show strong interest for homes in affordable price ranges, though sales volumes continue to disappoint as buyers find it difficult to purchase short sales and foreclosures and banks remain reluctant to lend.
The U. S. Department of Housing and Urban Development places the median family income in 2010 at $64,400, which means that at least fifty percent of families could afford to buy a home priced at $150,000 or higher. Assuming the generally accepted monthly mortgage payment to monthly income ratio rate of 25 percent, a person with an annual salary of $64,400 could reasonably afford a $215,000 home with a 5 percent down payment, an interest rate of 5 percent on a 30 year mortgage and property taxes at 1.25 percent.
As of the end of December 2010, Movoto.com reports 55% of homes for sale on Movoto.com are priced under $250,000 and 24% are priced between $150,000 and $250,000. Movoto’s December user search data shows signs that home buyers are responding to the affordability of homes on the market. 53% of home searches in December 2010 were for listings in the below $250,000 price range. Interest in sub-$150,000 homes increased strongly from 22% of searches in February 2010 to 29% in December.
“According to the numbers, buyer interest, affordability and home price inventory have aligned,” said Henry Shao, CEO of Movoto. “Median income levels can support mortgages at the most readily available housing prices, but we have yet to see a corresponding jump in sales. While overzealous lending practices have been blamed for the real estate fallout, it seems that now that people can afford what is available the lending market is not meeting home buyer’s needs for loans to purchase reasonably priced homes and banks are still making it difficult to purchase distressed properties.”
Founded in 2005, San Mateo-based Movoto is led by an experienced team of real estate industry veterans and Internet technology experts with a shared vision of empowering real estate consumers. Movoto provides a unique online home buying solution that combines innovative, easy-to-use research tools with ready access to a network of experienced local real estate agents. Movoto currently serves more than 30 top US metro areas.