Housing Affordability at All-Time High

• March 3rd 2009

by Mark Wellborn

✉️ Want to forward this article? Click here.

The National Association of Realtors reported today that housing affordability is at an all-time high. At 166.8, NAR’s Housing Affordability Index (HAI) is at its highest point since tracking started in the 1970s.

The HAI is an index that uses the relationship between home prices, mortgage interest rates and family income to determine the affordability of housing in the U.S. If the index is at 100, it means that a family with the median national income can qualify for a mortgage on a single-family home at the national median price.

In January, the index rose 13.6 percentage points to 166.8.

From NAR:

The HAI indicates a median-income family, earning $59,800, could afford a home costing $283,400 in January with a 20 percent down payment, assuming 25 percent of gross income is devoted to mortgage principal and interest; affordability conditions for first-time buyers with the same income and small down payments are roughly 80 percent of that amount. A year ago, the typical family could afford a home costing $263,300.

NAR President Charles McMillan:

“The buying power of a typical family has risen significantly. With the strong housing stimulus, we are hopeful inventory will get trimmed and help prices to stabilize in many areas by the end of this year.”

This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/housing_affordability_at_all-time_high/607.