Housing “Affordability” at an All Time High

NAR President Charles McMillan:

“Housing affordability is at a record high (13.6 percentage points in January to 166.8, a new record high)– the buying power of a typical family has risen significantly,” McMillan says. “With the drop in interest rates, a median-income family can afford a home costing $20,000 more than a year ago for the same monthly mortgage payment. With the strong housing stimulus, we are hopeful inventory will get trimmed and help prices to stabilize in many areas by the end of this year.”

So what this means is that a median-income family, earning $59,800, could afford a home costing $283,400. This assumes a 20 percent downpayment, and a 25 percent of gross income for mortgage PI. Compered to last year where the typical family could afford a home costing $263,300.