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Micro News – Mortgage News Daily#249986

March 7, 2012

NAR: Housing Affordability Index Hits Record High

Housing affordability conditions have reached the highest level since recordkeeping began in 1970, according to the National Association of Realtors.

NAR’s Housing Affordability Index rose to a record high 206.1 in January, based on the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the household purchasing power.

An index of 100 is defined as the point where a median-income household has exactly enough income to qualify for the purchase of a median-priced existing single-family home, assuming a 20 percent downpayment and 25 percent of gross income devoted to mortgage principal and interest payments. For first-time buyers making small downpayments, the affordability levels are relatively lower.

From: http://ping.fm/wh3yP

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