NAR: Housing Affordability at 30-Year High

The typical American family's ability to purchase a median-priced existing home increased in the first quarter to the highest level in 30 years, according to the National Association of Realtors.The NAR's composite Housing Affordability Index stood at 144.0, up from 140.7 in the fourth quarter and from 135.8 a year earlier. The previous high for the index was 147.9 in 1973. The latest index number means that the typical household in the United States had 144% of the income needed to buy a home at the first-quarter median existing-home price, which was $161,500. NAR chief economist David Lereah said the affordability index may decline several percentage points by the fourth quarter as a result of a gradual rise in mortgage interest rates, but that affordability conditions should remain favorable. The index measures affordability for homebuyers making a 20% downpayment. An index level of 100 is defined as the point at which a median-income family has the income necessary to buy a median-priced existing home. The NAR estimated the median family income to be $52,929 in the first quarter. The NAR can be found online at http://realtor.org.