With Mortgage Rates Below 5%, Housing Highly Affordable For 7th Straight Quarter
Excerpt of a Builder.com article:
Housing affordability remained near its highest level nationwide for the seventh consecutive quarter as interest rates dipped below 5%, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI) released on Nov. 18.
Interest rates during the quarter were at their lowest level since the HOI was first compiled nearly 20 years ago.
The HOI indicated that 72.1% of all new and existing homes sold in the third quarter of 2010 were affordable to families earning the national median income of $64,400. The index for the third quarter almost equaled the record-high 72.5% set during the first quarter of 2009 and marked the seventh consecutive quarter that the index rose above 70%. Until 2009, the HOI rarely topped 65% and never reached 70%.
"With interest rates remaining at historically low levels, and house prices starting to stabilize, homeownership is within reach of more households than it has been for almost 20 years," said NAHB Chairman Bob Jones. "While these favorable conditions are beginning to draw home buyers back into the market, builders continue to have major problems in obtaining credit for new-home construction, and this obstacle must be overcome if builders are to respond to improving demand moving forward."
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