By Matt Allen
Vice President, Portfolio Lending (NMLS #415037)

Low Rates Are Good News For First-Time Home Buyers in Kansas City

Feb 10, 2020

  • First-Time Home Buyer
  • News
  • Mortgage Rates
  • Home Loans

With mortgage rates at the lowest point in three years, first-time home buyers are finally making the required income to allow the purchase of a starter home.  That’s according to Lawrence Yun, chief economist of the National Association of Realtors, interviewed for a recent article on

“The low mortgage rates are clearly helping the market conditions,” said Yun. “Home prices consistently rising at a faster pace than people’s income growth has hurt, but because of the historically low rates, it’s providing marginal opportunities for first-time buyers.”

This conclusion was reached after the second quarter of 2019 when the NAR’s First-Time Home Buyer Affordability Index determined that first-time home buyers had 100% of the median household income required to buy a home.  The index showed they had reached 105% of the required income by the third quarter.

The biggest challenge for first-timers in 2020 will be the same as it was in 2019 – inventory.  A September 2019 report by RE/MAX shows that buyer demand outpaced homes for sale in August 2019, causing the most significant inventory decline in 13 months. The number of homes for sale fell 5.5% from 2018’s level and 1.5% from the prior month. This low-inventory market can drive up pricing beyond reach for many buyers, despite the low mortgage rates.

There are, however, many major markets that are relatively affordable for first-time buyers. A May 2019 Trulia report showed that these metro areas have the highest percentage of affordable neighborhoods:

  • Pittsburgh, Pennsylvania
  • Columbus, Ohio
  • St. Louis, Missouri
  • Kansas City, Missouri
  • Indianapolis, Indiana

In Kansas City, which has a median home value of $192,900 and a household median income of $62,600, 16.4% of its zip codes include neighborhoods where homes are affordable to the typical home buyer.

So if you’re looking for your first home in Kansas City, or anywhere in the U.S., give the experts at NASB a call at 855-465-6272.