Feb Housing Affordability Hits Another Record High
The National Association of Realtors (NAR) released its latest Housing Affordability Index (HAI) today, showing that housing affordability reached an all-time, historic record high of 173.5 in February (see chart above).
A HAI of 173.5 would mean that the typical household earning the median family annual income of $59,726 in February would have 173.5% of the qualifying income to purchase a median-priced existing single-family house ($164,600) with a 20% down payment, which would be the highest level of housing affordability since the NAR started reporting housing affordability in 1971. Since mid-2006, the HAI has risen almost 74 points, from 99.6 in July 2006 to 173.5 last month.
Stated differently, the annual qualifying income required to purchase a median-price house (with a 20% down payment) is only $34,416, with monthly payments based on a 5.12%, 30-year fixed-rate mortgage ($716.58 per month for principal and interest). Given the median family income of about $59,726, the typical family would have 173.5% of the income required to qualify for the mortgage to purchase the $164,600 home.
MP: The record-high housing affordability will play an important role in the real estate market's recovery, and should be considered very positive news. This key real estate market statistic frequently gets overlooked by the media, which often seems more interested in reporting "record high jobless claims/employment losses/______ fill in the blank" when it's negative news, than reporting record high statistics like housing affordability when it's good news.