According to the National Association of Realtors, housing affordability conditions have reached the highest level since record keeping began in1970.
In January, NAR's Housing Affordability Index rose to record high 206.1. The index is based on the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the household purchasing power.
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 existing single-family home, assuming a 20 percent down payment and 25 percent of gross income devoted to mortgage principal and interest payments. For first-time buyers making small down payments, the affordability levels are relatively lower.
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