Housing affordability conditions for all buyers reached a milestone in the first quarter, according to data released by the National Association of Realtors on May 15, 2012.
NAR’s composite quarterly Housing Affordability Index rose to a record high of 205.9 in the first quarter, 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. This is the first time the quarterly index broke the 200 mark since recordkeeping began in 1970.
The index shows the median income family, earning just under $61,000, could afford a home costing $325,500 in the first quarter, which is 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.
For full article see ACA International