Affordability Runs High. Interest rates may have soared the last two months, but it didn't deter home buyers much. Those consumers found the most buyer-friendly market since 1973, according to the National Association of Realtors housing affordability index released May 10. The index, which measures affordability factors for all home buyers, was 140.9 in the first quarter of 1994, compared to 132.5 during the same period a year ago. When an index measures 100, a family earning the median income has exactly the amount needed to purchase a median-priced resale home, using conventional financing and 20% down payment. Despite a slight dip in the affordability index for January, February and March, compared to the previous quarter, NAR said affordability has not been as consistently favorable since early 1973. NAR's first-time home buyer's index shows that the qualifying income needed for conventional financing covering 90% of a $91,300 starter home was $26,666. Yet the median income of prime first-time buyers was $24,436, a difference of $2,230.
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