Properties are more accessible today, than a few years ago Properties are more accessible today, than a few years ago
In short, taking into account wage growth in recent years, the mortgage payment for a 25-year amortization is less expensive. Therefore, for a similar situation, properties are more accessible today than a few years ago.
However, the constrictions of mortgages of recent years, such as reducing the amortization period from 35 years to 30 years (January 2011) and 30 years to 25 years (June 2012), prevented some buyers from spreading out payments, because this change resulted in increased monthly payments. Therefore, for the same amortization period the situation has improved since the end of 2007, but some options to reduce the monthly payment and thus increasing affordability no longer exist.
In conclusion, the results of the index showing a much less pessimistic situation may suggest the rise in prices. There is a rather slow improvement of accessibility in recent years. The index therefore supports the theory of a more recurring market, which, after a peak, is slowly gearing up to a soft landing.
