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housing affordability: NAR: Housing Affordability Falls To A 6-Month Low - 08/05/09 08:44 AM
According to the NAR, housing affordability fell again in June to a reading of 159.2. This is the lowest reading since December when we saw 159.1.
The decline in housing affordability is due to a trend of rising mortgage rates, an increase in the median home value which is driven by seasonal variances, and a decline in median family income to the lowest point in over a year.
What may come as a surprise to many though is that despite this fall in housing affordability, pending home sales were the strongest they have been in over a year in June.
The evidence … (4 comments)
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housing affordability: Housing Affordability, Mortgage Rates, And Home Sales - 07/03/09 08:21 AM
The NAR recently published their May Housing Affordability Index which showed that while affordability did drop from a record high 178.8 in April to 171.6 in May, it remains well above historic norms.
Prior to this year, the highest housing affordability index reading was 147.9 in 1973. The first five months of 2009 the index has averaged 174.72.
To get some perspective on the current index for 2009 and the relationship to existing home sales, here is what the housing affordability index has looked like over the past couple of years according to the NAR:
Affordability Index / Mortgage Rates / Existing … (0 comments)
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housing affordability: NAR's Lawrence Yun, The 30-Year Fixed, and Home Sales - 06/11/09 02:27 PM
The Mortgage Bankers Association announced on Wednesday that the 30-year fixed rate mortgage surged to 5.57% from the previous week at 5.25%. This is the highest rate for the weekly survey since the week of November 26th of 2008 when the 30-year was at 5.99%.
What is interesting is that despite the 30-year fixed rising nearly a full percentage point over the past month, the demand for mortgage purchase applications has not been impacted. And the reason purchase applications have not been impacted is because there was never a bounce when rates plunged to historic lows, housing affordability was already the highest on record. … (11 comments)
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housing affordability: Mortgage Purchase Applications Indifferent To Rising Rates - 06/04/09 10:27 PM
Despite mortgage rates surging from 4.81% to 5.25% for the past week, mortgage purchase applications increased 4.3% to a reading of 267.7.
While 267.7 is still not indicative of strong demand for real estate, what is interesting is that at least for the interim, demand was not negatively impacted by rising rates, nor will it be as long as rates stay below 6%.
Over the past several months, going all the way back to December 3rd of 2008, when mortgages rates plunged from 5.99% to 5.47%, demand for real estate has been largely unaffected by historically low mortgage rates.
Here is … (2 comments)
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housing affordability: NAR: Housing Affordability In March Falls Again - 05/23/09 08:53 PM
According to the National Association of REALTORS, housing affordability fell for the second straight month to 166.7 in March due to the median home value rising for the second straight month.
Housing affordability, much like housing inventory or the month's supply of housing, is best understood in the context of the year over year changes. The reason for this is because real estate is seasonal, median home values can fluctuate from month to month and as a result, the affordability index can be sensitive to this.
What is relevant about this NAR index which measures the relationship between median home values, mortgage rates, and … (4 comments)
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housing affordability: Housing Affordability vs. Housing Values - 03/21/09 05:24 PM
With so much focus on making housing affordable, has everybody forgotten about considering the impact that falling home values have on the homeowner and the broader economy?
For those of you keeping score at home, housing affordability is currently the highest on record when you account for mortgage rates, median home values, and median incomes. In 1973, when the NAR first began tracking housing affordability, the composite index was 147.9. Never since 1973, in over 3.5 decades, has housing been as affordable as it was then...until now when the composite index hit 166.8. And yet despite this record for housing affordability, the Fed … (3 comments)
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housing affordability: Housing affordability reaches a new record high - 03/04/09 09:22 AM
The NAR is reporting that housing affordability as measured by mortgage rates, median income, and median home values, has reached a new record high as of January of 2009.
The composite index increased from 153.2 in December to 166.8 in January. Historically, the highest affordability index was in 1973 when it was 147.9, the first year that the NAR began tracking this indicator.
In other words, in theory, never before has there been a better time to buy a home. Yet despite this, existing home sales are the weakest they have been in 12 years and new home sales are the lowest … (2 comments)
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housing affordability: Bernanke: Affordability not the issue - 02/25/09 06:54 PM
Federal Reserve chairman Ben Bernanke said yesterday what I have been saying for several months now, "Affordability is not the issue it was a few years ago" in terms of the housing market. In fact housing affordability, according to data that the NAR collects, is the highest on record going back to 1973.
The reason this is an interesting statement is that the Fed recently agreed to purchase approximately $500 billion in mortgage backed securities in an effort to drive down mortgage rates and ultimately stimulate demand for real estate, it didn't have the intended results. As mortgage rates plunged by nearly a full … (1 comments)
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housing affordability: Peter Schiff on Housing - 01/23/09 10:24 PM
Luke Mullins who has a blog with U.S. News & World Report titled "The Home Front", recently did an interview with Peter Schiff. For those of you who don't know, Peter Schiff is a staunch "free market" guy and is the president of Euro Pacific Capital. He's also one of the most bearish people you will even hear talk about the future of the U.S. economy, and he has been for years. And for what it's worth, the guy has been dead on and I tend to agree with most of what he has to say, except for when it comes to … (13 comments)
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housing affordability: Why is Toll Brothers still speaking in the language of "affordability"? - 01/22/09 04:46 PM
According to a blog published by CNBC's Diana Olick, Toll Brothers announced today that they were going to offer a 3.99% fixed rate mortgage on new homes that they sell so long as the buyer has 20% down and a 720 or higher FICO - fair enough, you certainly can't give the homes away like they were doing in 2005, you need to have some standards.
First of all, I need to concede that you have to give CEO Robert Toll some credit for actually trying something new in order to stimulate sales. And in fact, even if they don't get a … (7 comments)
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housing affordability: Speculating vs. Investing and The "Circuit Breaker" - 01/21/09 09:18 PM
As I have written about several times before, focusing a housing stimulus plan at first time home buyers as Obama is proposing, and the NAR has lobbied for, with a $7,500 tax credit, is not going to have a meaningful effect on the housing depression.
With homeownership rate hovering near 68% compared to historic norms of 64%, and with housing affordability the highest on record since 1973, it begs the question as to how many qualified first time home buyers that have the credit and capital, don't already own a home?
There is something to be said about the law of … (4 comments)
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housing affordability: I am begining to like Diana Olick - 11/18/08 12:09 PM
For those of you who don't know, Diana Olick is CNBC's housing correspondent and she also has her own blog on CNBC.com.
She made a great post today about something that I have been talking about now for a while, housing affordability: http://www.cnbc.com/id/15837671/
But it may not be what you think.
According to a report that she cites from the National Association of Home Builders, housing affordability has reached it's highest level in more than four years.
That should indicate that more homes are being sold this year than there were four years ago right?
That is what all of the … (2 comments)
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Mark MacKenzie
Phoenix,
AZ
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Mark MacKenzie Real Estate Planning
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