The affordability of housing has reached a 20-year high, according to figures compiled by the National Association of Realtors.
The association's index reached 132.6 in the second quarter, up from 118.9 a year earlier. An index of 100 means that a family earning the median income has exactly the amount needed to buy a median-priced resale home with a 20% dowm payment.
The second quarter number means that the media-income family has 132.6% of the income needed to buy a median-priced home. Thus, well over half of all household can afford to buy, but the figures do not indicate how many.
Gain Shown for Renters
The outlook for first-time homebuying has also improved significantly, the association's report said. Among renters between the ages of 25 and 44, the the affordability index reached 86.7, up from 78.5 a year ago. This index assumes a lower-priced home and a down payment of just 10% on a conventional mortgage.
This means that less than half of prime prospects for first-time purchases can afford to buy. The median price used in the calculations for repeat buyers was $107,000, while the median for a stater home was $91,000.