Thursday, May 29, 2008

Housing Affordabilty Remains High in April

The National Association of Realtors released its latest report today on the Housing Affordability Index (HAI) for April, showing a slight decline to 129.4 from the March level of 130 (see chart above) due to a slight increase in median-price home in April.

A composite HAI of 129.4 means that a family earning the median family income in April ($60,185) had 129.4%% of the income necessary to qualify for a conventional loan (at 6.03%) covering 80% of a median-priced existing single-family home in April ($200,700).

Since July 2007 when the HAI was at only 103.6 (due to higher home prices and interest rates, $228,500 and 6.8% respectively), the 25.8 point increase in housing affordabilty to 129.4 in April should continue to play an important role in the recovery process for the slumping real estate market. It's a buyer's market.


At 6/01/2008 11:12 AM, Blogger Rolfe Winkler said...

Mark, like your post. Would be very interested to see historical data for the HAI. How far back does that data go? How does it compare with the late 70s/early 80s when mortgage rates skyrocketed??

At 6/03/2008 12:50 PM, Anonymous Anonymous said...

In 2006 the median household income was $48,201 according to the Census Bureau. Where did the NAR get $60,185?

OK, looking at the report to which you (Mark) linked: NAR reports 2006 median household income to be $57,612.

That's a big discrepancy from was the census bureau reports!


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