At the national level, housing affordability is still very high thanks to lower mortgage rates in spite of higher home prices. What is affordability like in your market?

• In spite of reduced affordability from last month and last year’s near-record levels, the median income U.S. family earns almost double what is needed to purchase the median priced home, so affordability remains high.
• Housing affordability is down for the month of March in the U.S. as rising incomes were not enough to completely offset higher mortgage rates and home prices from February to March.
• From one year ago, affordability is down as lower mortgage rates and higher incomes have not completely offset home price gains.
• By region, affordability is down from one month ago in all regions except the Midwest, where there was no change. From one year ago, affordability is higher in the Northeast and Midwest and lower in the South and West as huge home price gains overwhelmed slightly lower mortgage rates.
• Check out the full data release here.
• The Housing Affordability Index calculation assumes a 20 percent down payment and a 25 percent qualifying ratio (principle and interest payment to income). See further details on the methodology and assumptions behind the calculation here.

At the national level, housing affordability is still at a near-record level thanks to lower mortgage rates and in spite of higher home prices. What is affordability like in your market?

• Housing affordability is down for the month of February in the United States, as rising incomes were not enough to completely offset higher mortgage rates and home prices from January to February. In spite of the slight decrease, affordability remains at a near-record level.
• In fact, after incorporating revised price data, last month was the highest affordability index on record; data goes back to January 1971.
• From one year ago, affordability is down slightly as lower mortgage rates and higher incomes have not completely offset double-digit home price gains.
• By region, affordability is up slightly from one month ago in the West, down in the Northeast and South. There was no change in the Midwest. From one year ago, affordability is higher in all regions except the West, where price gains have had the most dramatic effect.
• In the Midwest and South the median income family earns double what is needed to purchase the median priced home, so affordability remains high.
• What does housing affordability look like in your market?
• Check out the full data release here.
• The Housing Affordability Index calculation assumes a 20 percent down payment and a 25 percent qualifying ratio (principle and interest payment to income). See further details on the methodology and assumptions behind the calculation here.

The recent Existing Home Sales release published showed a  sixth consecutive month of single-family home prices higher than a year ago. What does this mean for affordability? The answer may surprise you.

The August Existing Home Sales release published in late September showed a strong rise in home prices from a year ago – 10.2 percent for the median priced existing single-family home sold. This news is reassuring for owners who can expect that wealth they have accumulated in their property will maintain or increase, but at first glance this seems to be troubling news for potential buyers who have not purchased a home yet. Have they missed the best time to buy?

The Housing Affordability Index offers some reassurance for these would-be buyers. As it turns out, the Housing Affordability Index suggests that the national median priced home was actually more affordable for the median-income family in August 2012 than it was in August 2011 even though home prices are up.

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The recent Existing Home Sales release published showed a 5th consecutive month of home prices higher than a year ago. What does this mean for affordability? The answer may surprise you.

The July Existing Home Sales release published in late August showed a strong rise in home prices from a year ago – 9.4 percent for the median priced existing home sold. This news is reassuring for owners who can expect the wealth they have accumulated in their property to maintain or increase, but at first glance this seems to be troubling news for potential buyers who have not purchased a home yet. Have they missed the best time to buy?

The Housing Affordability Index offers some reassurance for these would-be buyers. As it turns out, the Housing Affordability Index suggests that the national median priced home was actually slightly more affordable for the median income family in July 2012 than it was in July 2011 even though home prices are up.

How is this possible? While prices are up compared to one year ago, mortgage rates are nearly a percentage point lower and incomes are up, though only modestly. Since the Housing Affordability Index factors in the effect of house prices AND income and mortgage rates, it is the case that nationally, the median priced home is slightly more affordable to the median income family than it was a year ago. At 182.0 compared to 178.0, the Housing Affordability Index shows that the median income family earns 82 percent more than the income needed to qualify to purchase the typical home that was sold in July. Regionally, affordability is improved over one year ago in every area except the West where the more than 20 percent year-over-year price gain offset increased income and the benefit of lower mortgage rates. Still, even in the West, the median income family earns at least 40 percent more than is needed to qualify to purchase the median priced existing home. Check out the data release here.

The Housing Affordability Index calculation assumes a 20 percent down payment and a 25 percent qualifying ratio (principle and interest payment to income). See further details on the methodology and assumptions behind the calculation here.