NAR: Housing Affordability Slips

The typical American family's ability to buy a median-priced home declined in the second quarter as a result of rising interest rates and higher home prices, but it remained at a historically high level, according to the National Association of Realtors.The NAR's composite Housing Affordability Index stood at 133.6, down from 144.1 in the first quarter and from 143.8 a year earlier. (The first-quarter level was the second-highest index reading since 1973, the NAR said.) The latest index number means that the typical household in the United States had 133.6% of the income needed to purchase a home at the second-quarter median existing-home price, which was $183,800. "Housing affordability conditions for the U.S. as a whole have been so favorable that even with a decline, the current reading is quite good," NAR chief economist David Lereah said. "The last time the affordability index was at this level was in the second quarter of 2002, and that was a record year for home sales." The NAR can be found online at http://realtor.org.