Housing Affordability At Record High in October
According to a release today from The National Association of Realtors, the Housing Affordability Index reached a new all-time record high of 197.8 in October (see chart above). Based on the hypothetical purchase of the median-priced home of $161,600 in October, financed at the average mortgage rate of 4.32% (with a 20% down payment), the median family income of $60,871 was 197.8% of the $30,768 income required to qualify for the financing and the $641 monthly payments (principal and interest).
In other words, median family income in the U.S. is now nearly double the income required to qualify for the purchase of the median-priced home. Housing has probably never been more affordable in U.S. history than it is today, and you would think that the record affordability would eventually have to start translating into robust home sales and a strong real estate recovery.