NAR: Housing Affordability Dips

The typical American family's ability to buy a median-priced existing home decreased in the second quarter, but was still at the second-highest level since 1973, according to the National Association of Realtors.The NAR's composite Housing Affordability Index stood at 143.4 in the second quarter, down from the 30-year high of 144.1 in the first quarter but up from 131.6 a year earlier. The latest index number means that the typical household in the United States had 143.4% of the income needed to buy a home at the second-quarter median resale price, which was $168,900. "Historically low mortgage interest rates largely offset higher home prices, keeping housing affordability close to a three-decade high," said NAR chief economist David Lereah. "With a recent rise in interest rates, the Housing Affordability Index can be expected to slide but remain very 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 $53,285 in the second quarter. The NAR can be found online at http://realtor.org.