Register Real Estate Advisors

Housing affordability conditions have reached the highest level since recordkeeping began in 1970, according to the National Association of Realtors.

NAR’s Housing Affordability Index rose to the record high 206.1 in January, based on the relationship between median home price, median family income and average mortgage interest rate.  The higher the index, the greater the household purchasing power.

An index of 100 is defined as the point where a median-income household has exactly enough income to qualify for the purchase of a median-priced existing single-family home, assuming a 20% down payment and 25% of gross income devoted to mortgage principal and interest payments.    For first-time buyers making small down payments, the affordability levels are relatively lower.

NAR President Moe Veissi, broker-owner of Vessi & Associates Inc., in Miami said this latest data underscores buyer opportunities in today’s market.  “This is the first time the housing affordability index has broken the two hundred mark, meaning the typical family has roughly double the income needed to purchase a median-priced home,” he said.  “For buyers who can qualify for a mortgage, now is a very good time to become a homeowner.”

NAR projects the affordability index for all of 2012 will be at an annual high with little movement in mortgage interest rates or home process during the year.  “Housing inventory levels have declined to a point where conditions are becoming much more balanced in much of the country,” Veissi said.  “If access to credit improves, we could see a much more meaningful increase in home sales and broader stabilization in home prices with modest gains in areas with stronger job growth.”

The National Association of Realtors, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

AUSTIN (Austin Business Journal) – According to the National Association of Realtors (NAR), housing affordability is at an all-time high.

NAR’s housing affordability index measured 206.1 in January, up 16.4 points from the previous year.

The index is calculated by combining housing prices, household incomes and mortgage rates. A baseline index of 100 means that a household with the area’s median income matches the requirements needed to purchase a median-priced home with a 20 percent down payment.

NAR President Moe Veissi believes the high level of affordability with declining housing inventory could help stabilize the market in many parts of the United States.

“If access to credit improves,” he said, “we could see a much more meaningful increase in home sales and broader stabilization in home prices with modest gains in areas with stronger job growth.”

The Chicago-based trade organization began using the housing affordability index in 1970.

COLLEGE STATION (Real Estate Center) – Texas beats the rest of the country when it comes to housing affordability, according to first quarter 2009 Texas Housing Affordability Index (HAI) numbers compiled by the Real Estate Center at Texas A&M University.

The numbers reflect the ability of a median-income family to purchase a median-priced existing home in their area. Texas had a ratio of 1.95 in first quarter 2009 compared with the nation’s 1.55.

“The slowdown in the housing market nationally and within Texas has led to significantly increased housing affordability everywhere, and Texas continues to maintain its place as the most affordable high-growth state in the country,” said Dr. Jim Gaines, research economist with the Center.

The index is posted on the Center’s website.