NAR: Housing Affordability Improves

The typical American family's ability to purchase a median-priced home increased in the fourth quarter as a result of a seasonal decline in home prices and rising family income, according to the National Association of Realtors.The NAR's composite Housing Affordability Index stood at 139.2, up from 136.6 in the third quarter but down from 140.3 a year earlier. The latest index number means that the typical household in the United States had 139.2% of the income needed to purchase a home at the fourth-quarter median existing-home price, which was $171,600. NAR chief economist David Lereah said the seasonal home price decline stems from the fact that a higher ratio of singles and childless couples typically buy homes in the fourth quarter, and they generally buy more moderately priced homes. "Even so, the median price is 6.6% higher than [in] the fourth quarter of 2002, and the buying power is strong because the typical family could afford a home costing $238,900 -- well above the median price," he said. The NAR can be found online at http://realtor.org.