Housing affordability increased at end of 2012

February 25th, 2013

Homeownership became more affordable for buyers during the fourth quarter of 2012.

Buyers seeking a mortgage during the final three months of 2012 may have found that prices were more affordable than in previous periods.

The National Association of Home Builders/Wells Fargo Housing Opportunity Index announced that 74.9 percent of homes sold between the beginning of October and end of December were affordable to families earning the U.S. median income of $65,000. This was largely due to competitive interest rates. Separately, the NAHB/First American Improving Markets Index found that 259 out of 361 metros are characterized as “improving.”

“The most recent housing affordability data should be encouraging to many prospective home buyers, because it shows that homeownership remains within reach of median-income consumers even as most local markets appear to be on a recovery path,” said NAHB chairman Rick Judson.

Homeownership is expected to trend upward in 2013 as interest rates stay low, home prices stabilize and national unemployment rates begin to show small signs of decline. However, buyers will still be required to maintain strong credit ratings in order to secure the best rate from their mortgage service company. Therefore, it’s important that buyers strive to improve their finances in order to take advantage of competitive mortgage terms.