The National Association of REALTORS published their monthly Housing Affordability Index which showed that housing affordability reached yet another record high in February with a composite index of 173.5. This is up from the previous record high of 172.6 set last month, which was up from the record high of 153.2 set in December. Never before since 1973 when the NAR began tracking this data has housing been more affordable.
The index is a measure of the median priced single family home, the median family income, and the average 30-year fixed rate mortgage.
Yet despite this record high for housing affordability, home sales, both new and existing, continue to face strong headwinds. And the reason home sales face strong headwinds is because it is not about housing affordability. A lot of factors are impacting declines in home sales including job losses, mortgage availability, the fear of falling home values, as well as the lack of a meaningful housing stimulus plan. But the one thing that is not prohibiting home sales is housing affordability.
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