New Realtor.com® Buying Power Tool Shows What Homes Are "Affordable" vs. "A Stretch" Based on the Buyer's Finances
Home shoppers can now filter homes by different buying power categories to only see the homes they can afford
SANTA CLARA, Calif., Aug. 4, 2022 /PRNewswire/ -- With interest rates constantly changing and home prices at all-time highs, understanding what you can afford has never been more important. To give buyers a more objective view of their budget, Realtor.com® has introduced a new buying power tool to help home shoppers see whether a specific home is "affordable," "a stretch," "difficult" or "out of reach." It uses a home a shopper's specific financial details, current mortgage rates, taxes, insurance and HOA fees to determine if the monthly payments will be comfortable.
Buying power labels now appear directly on home listings on Realtor.com®, making Realtor.com® the first national home search site where shoppers can filter their search by selecting their desired affordability range.
Recent Realtor.com® surveys found that more than two-thirds (68%) of shoppers were surprised by what they could actually afford for their first home. Additionally, 32% of recent buyers found it difficult to understand how changing mortgage rates affected their monthly payments and 62% were surprised by closing costs. Realtor.com®'s affordability calculator and buying power tool can help prevent these unhappy surprises during the home buying process.
"There is nothing more disappointing than falling in love with a home only to realize that you can't afford it, and nothing more exciting than realizing you can afford that dream home. However, there are many factors that go into affordability," said Colleen Coyle®. "We introduced this tool to help shoppers better understand how much home they can afford and if specific homes fit their budget given their personal financial situation. This tool is especially important right now with rising interest rates – which can add hundreds of dollars to monthly payments and impact buying power."
A home's affordability is more than just the asking price. Many first-time home buyers don't realize the added costs of things such as HOA fees, taxes and insurance, not to mention closing costs, which can really add up. Realtor.com®'s new buying power features give home shoppers the opportunity to input their monthly income, debt payments and savings to determine their budget. Users can save this information to their buyer profile and then search only for homes that fit that budget.
To calculate buying power, visit the Realtor.com® affordability calculator and enter your income, monthly debt payments and available funds. By saving this information to your profile, listings on Realtor.com® will include an affordability label – "affordable," "a stretch," "difficult" or "out of reach." Users can also filter their search by homes that are within their desired affordability range.
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