Monday, March 9, 2009

Housing Affordability at Record High

Some great news for homebuyers was released this week. On Tuesday, the National Association of Realtors (NAR) reported that its Housing Affordability Index (HAI) rose 13.6% in January to 166.8, a new record high. In fact, the relationship between home prices, mortgage interest rates and family income is the most favorable since tracking began in 1970.
The HAI is a relative index where a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced existing single-family home. The higher the index, the better housing affordability is for buyers.
According to NAR President Charles McMillan, "The buying power of a typical family has risen significantly. 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."

Smitha Ramchandani is a licensed real estate professional at Weichert Realtors' Morristown West, New Jersey office. She is a Certified Buyer Specialist, and a Home Marketing Expert.. You can reach Smitha at: 973-953-7777 Mobile or 973-455-1900 Extension 122 (Office) or online at: or or