NAR: Housing Affordability Declines

The typical American family's ability to buy a median-priced home decreased in the second quarter largely as a result of higher home prices, according to the National Association of Realtors.The NAR's composite Housing Affordability Index stood at 120.8, down from 133.2 in the first quarter and from 132.3 a year earlier. The latest index number means that the typical household in the United States had 120.8% of the income needed to purchase a home at the second quarter's median existing-home price, which was $208,500. "The strong rate of home price appreciation caused some erosion in affordability conditions, yet it hasn't dampened the market because the second quarter was a record for existing-home sales," NAR chief economist David Lereah said. The NAR can be found online at http://realtor.org.