More great
news for homebuyers was released this week. On Tuesday, the National
Association of Realtors (NAR) reported that its Housing Affordability Index
(HAI) rose 13.6% in January to 166.8, a new record high. In fact, the
relationship between home prices, mortgage interest rates and family income is
the most favorable since tracking began in 1970.
The HAI is a
relative index where a value of 100 means that a family with the median income
has exactly enough income to qualify for a mortgage on a median-priced existing
single-family home. The higher the index, the better housing affordability is
for buyers.
According to
NAR President Charles McMillan, "The buying power of a typical family has
risen significantly. With the drop in interest rates, a median-income family
can afford a home costing $20,000 more than a year ago for the same monthly
mortgage payment."
