HUD: Home Affordability at 40-Year High
Tue Jan 17, 2012 on Blog
In this latest report HUD announced the October 2011 affordability index was 197.8. Compare that to the height of the house price bubble in 2006, when it was close to 100, and the average family could barely afford a moderately-priced home.
Zillow Real Estate also reports that home values are starting to level out, falling only 0.1 percent from October to November 2011. While that does represent a 4.6 percent decline from the year before, it is a good sign that we’re closer to stability in the home market than ever before, with market prices at 2003 levels. Still unconvinced it’s a good time to buy? Mortgage rates are also at record lows, with the average rate of a 30-year fixed mortgage at 3.91 percent, according to AOL Real Estate.
“With interest rates at historically low levels and markets across the country beginning to improve, home ownership is within reach of more households,” Bob Nielsen, chairman of the National Association of Home Builders, told Housing Predictor.
Now it’s not all sunshine and rainbows, with lenders using stricter standards when qualifying prospective home owners for mortgages, but despite that HUD says that home sales for new and existing homes are on the rise from last year. More and more housing markets are on the rebound, with 76 housing markets showing measureable improvement, including Cape Coral, Jacksonville and Punta Gorda, according to the National Association of Home Builders.
That’s up from compared to just 41 markets in December.
“This is an encouraging sign that gradually strengthening economic conditions are starting to take hold across a broader swath of America,” said NAHB chief economist David Crowe.