Buyers looking to purchase a new home in today's market are encountering a climate of affordability that's as high as it has been in 20 years.
The National Associated of Home Builders reported that 73.9 percent of homes sold during the fourth quarter of 2010 were affordable to American families earning the median national income of $64,400. That was the highest percentage on record since the company began tracking housing affordability 20 years ago, and it was well above the previous high of 72.5 percent, set in 2009.
Homebuyers have enjoyed a sustained period of affordability for roughly two years, said the report. Before 2009, the group's Housing Opportunity Index had never topped 70 percent, but it has surpassed the figure each quarter since.
Indianapolis registered as the country's most affordable market, with an eye-popping 93.5 percent of homes sold affordable to families making the median income of $68,700. The New York City metropolitan area was again the least affordable, with just 25.5 percent of local homes within reach of most families.
Low home prices and mortgage rates are helping to make applying for a home loan and purchasing a property more affordable. However, experts caution rates and values are expected to rise soon, meaning families who are planning on buying ought to do so sooner rather than later.
- NAR: Affordability persisted despite market fragility
- Mortgage rates drop from recent high levels
- Scorecard shows housing remains affordable
- First time-buyers returning to housing market
- Builders can expect stable year for housing