Housing Affordability
Bright spots exist in the current economy and one of those spots in housing affordability.
According to the Housing Opportunity Index (HOI) from National Association of Home Builders/Wells Fargo, housing remains highly affordable for the sixth consecutive quarter. The Index showed that 72.3 percent of all new and existing homes sold in the second quarter of 2010 were affordable to families earning the national median income of $64,400 per year. That's great news for people interested in purchasing real estate.
“Homeownership is within reach of more households than it has been for almost a generation,” said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. “Interest rates continue to hover at historic low levels, the economy is beginning to rebound and with house prices starting to stabilize, conditions are beginning to draw home buyers back into the market, which is a positive step on the path to recovery.”
According to the HOI, Syracuse, NY was the most affordable major housing market in the country. In that city, 97.2 percent of all homes sold were affordable to households earning $64,300 per year, which is the median family income for that area.
Housing affordability varies from locale to locale, of course, but it has been strong in many areas of the country for quite a while due to the general decline in housing prices in the current economy. This most recent HOI, at 72.3 percent, was very nearly the highest percentage on record. The record of 72.5 percent was set during the first quarter of 2009. The quarterly HOI began approximately 20 years ago.
Ultra-low mortgage interest rates, combined with the lower prices for housing, make this a very compelling time to purchase a place of one's own. As detailed in a recent post on this blog, 1963 mortgage interest rates are with us again. Many believe there has not been a better time to buy in recent memory.
Of course, what is keeping many individuals and families on the sidelines is the uncertainty about the economy and the uncertainty about jobs. These all-too-real issues often trump all the affordability in the world. And even if any person's particular job situation seems secure, it's the perception of possible rocky times ahead that can put buying plans on hold.
As with so many situations in life, however, it can be difficult to see the forest through the trees when we're actually standing amid those trees. Weigh all factors carefully. No one knows better than you what's the best course of action for your own situation. Gather your information from a variety of trusted sources. The question of "Why should I buy now?" is something to ask often. Do your research and see if you should take advantage of today's near-record housing affordability.
