November 19th, 2012
More individuals and households across the nation may find that purchasing a home is more affordable than ever, according to the latest housing data.
According to the National Association of Home Builders/Wells Fargo Housing Opportunity Index, 74.1 percent of all homes sold nationwide during the third quarter were affordable to families earning the U.S. median income of $65,000. The third-quarter data is an increase from the 73.8 percent of all affordable homes sold to this income bracket in the second quarter. The increase in affordability has largely been attributed to record-low mortgage rates.
“The latest housing affordability data is good news on two fronts, because it shows that the share of homes affordable to median-income earners has risen even as home prices have continued to gradually recover from their recession lows,” noted NAHB chairman Barry Rutenberg. “This is primarily due to the fact that mortgage rates are now lower than we’ve seen them since the HOI was initiated more than a decade ago.”
In addition to low rates, rental prices have experienced double-digit increases in some areas, which may be pushing more median-income families toward homeownership. As affordability is largely based on income, as well as personal spending factors, buyers should work closely with a mortgage consultant to seek out homes within their particular price range.