According to the National Association of Realtors (NAR), the year of 2012 was the best year in recorded history for favorable housing conditions. The NAR's Housing Affordability Index is based upon the national median home price, median family income and the average mortgage interest rate. The following infographic demonstrates how recent affordability levels compare very favorably against housing conditions as far back as 1989.
|Courtesy of Keller Williams Realty International -|
"Vision Speech" at KW Family Reunion 2013
NAR's chief economist Lawerence Yun predicts that home buyers will again be able to stay well within their means in 2013 with ". . . in terms of household buying power . . . a window of opportuniy remains open for buyers wo can qualify for a mortgage." The video below illustrates the dynamics of the NAR Housing Affordability Index.
Understanding NAR's Housing Affordability Index
By 2012, NAR's Housing Affordability Index surpassed and index of 200 for the first time in history. To put this in perspecive, an index of 100 is defined as the point where a median-income household has exactly enough income to qualify for the purchase of a median-priced home. NAR projects the housing affordability index to average 160 over the course of 2013, meaning that a median-income family would have 160 percent of the income needed to purchase a median price home.
Accordingly, with the lowest home prices in over a decade and historically low mortgage interest rates, it is difficult to imagine more favorable conditions for home sales.
InfoGraphic Courtesy of Millionaire Corner