The NAR housing housing affordability index climbs

Real Estate

The National Association of Realtors’ housing affordability index continued to climb in the first quarter of 2020, showing that it was easier to afford a home in the first quarter than any time in the past four years. Affordability increased as a result of both declining home prices and mortgage rates, month-over-month.

Released Tuesday, the affordability index reached 166.8, meaning the typical family possessed 166.8 percent of the estimated income required to purchase a home. The median existing single-family home was $274,600 and the average 30-year fixed-rate mortgage was 3.57 percent.

In the first quarter of 2019, the median existing single-family home was $254,900 but the average 30-year fixed-rate mortgage was 4.62 percent.

The index measures whether the typical family – defined as one earning the median family income as reported by the U.S. Census Bureau — could afford a median-priced existing single-family home.

A value of 100 means that the typical family has enough income to qualify for a mortgage on a median-priced home, assuming a 20 percent down payment and that the payment to income ratio cannot exceed 25 percent of the median family income.

More here.

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