For the median-income family, buying a home has never been more affordable, new surveys by the National Association of REALTORS® and National Association of Home Builders show.
Housing affordability reached a record high for the second-straight quarter in the first three months of this year, the National Association of Home Builders/Wells Fargo Housing Opportunity index shows. Nearly 78 percent of all new and existing homes sold in the first quarter this year were affordable to families earning the national median income of $65,000, according to the index.
NAR’s quarterly Housing Affordability Index also showed a record high in affordability in the first quarter. NAR first began keeping records on affordability in 1970.
According to NAR’s index, the median-income family earning under $61,000 could afford a home costing $325,000 — more than double the national median existing single-family home price of $158,100.
“The median monthly mortgage principal and interest payment for a median-priced home would take only 13.5 percent of gross income,” according to NAR’s affordability index.
However, while affordability remains high, many home buyers are still being shut out of the market and are unable to take advantage of the deals due to tight lending conditions, housing experts say.
"For those with good credit, we’ve never seen better housing affordability conditions or market opportunities than we see at present," says Moe Veissi, NAR’s president. "Although home prices are stabilizing and sales are rising, some buyers still have to jump through a lot of hoops to convince a lender that they are creditworthy, even for a mortgage that would be well within their means. This is especially true for self-employed buyers."
Indeed, Barry Rutenberg, NAHB’s chairman, echoes those comments, adding that “without this significant hurdle, the housing and economic recovery could be proceeding at a much stronger pace." More…