Real Estate Feedback Reports Show that Housing is More Affordable Than Ever

Guest contributor Showing Suite says:

According to real estate feedback reports conducted by the National Association of Realtors® (NAR), housing affordability conditions have achieved a 42-year record high. January 2012’s Housing Affordability Index indicated the new high is at 206.1, which is the first time since records began in 1970 that the index has hit or passed 200.

The housing affordability index aims to measure whether or not a typical family could qualify for a mortgage loan on an average-priced home. The point where a median-income household has enough income to be eligible for the purchase of an average-priced home is defined as 100 according to the index. This means that according to the NAR’s real estate feedback reports, the typical family has doubled the income required to purchase an average priced home. The NAR’s real estate feedback reports also project the 2012 affordability index will be at a record annual high, with little fluctuation in mortgage interest rates or home prices.

The affordability of housing has been steadily rising over the last few years. The index has risen from an average of 169.4 in 2009, to 174 in 2010, and to 184.5 in 2011.

NAR President Moe Veissi states, “For buyers who can qualify for a mortgage, now is a very good time to become a homeowner.” Although housing affordability is steadily rising, NAR forecasts home prices to decline even further, but at a much slower rate than previous years. “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,” Vessi said.

What does the NAR’s home affordability real estate feedback report mean for home buyers and home sellers? With homes being more affordable, do you find that you sell houses faster compared to years prior?

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