Nationwide Housing Affordability Index at Highest Level Since 1970

Real Estate Agent with Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty DRE# 00901962 Lic.1985

Nationwide Housing Affordability Index at Highest Level Since 1970

by Michelle Carr Crowe, Silicon Valley guide and Cupertino real estate agent

The National Association of REALTORS(R), aka NAR, reports the Nationwide Housing Affordability Index is at its highest level since tracking began in 1970.

The “Housing Affordability Index,” is a measurement used to gage how well the U.S. median family’s income can afford a median priced U.S. home.

Assumptions made by the index include:

20% down payment

25 percent of the household’s gross income is devoted to principal and interest payments

a Mortgage at the median interest rate.

An index of 100 is the point where the median income household has exactly enough income to qualify to purchase the median-priced single family home at median mortgage interest rate.  The higher the index number, the more home purchasing power the family possesses.

Randle Washington home for sale Michelle Carr Crowe January 29 2013 blog image

Since the Housing Affordability Index measures purchasing power through monthly payments related to household income, home prices and mortgage interest rates change the index number.

NAR expects the Housing Affordability Index to be 194 for 2012, based on all currently available information, a record number since NAR started tracking the index back in 1970.  The Housing Affordability Index was a record 186 in 2011.

NAR’s chief economist, Lawrence Yun notes home buyers can now stay well within their purchasing power, assuming borrowers meet today's lenders' still relatively stringent lending standards.

“Although 2012 was highest on record, the excessively tight underwriting precluded many would-be homebuyers from locking-in generational low interest rates,” Lawrence Yun says.

“Rising home prices and a gradual uptrend in mortgage interest rates will offset improvements in family income, but 2013 likely will be the third best on record in terms of household buying power. A window of opportunity remains open for buyers who can qualify for a mortgage.”

What does this mean?

SELLERS: More buyers can comfortably afford to buy homes in 2013.

BUYERS: You (and your competitors) are better positioned to afford to buy a home in 2013.

To learn more about the Housing Affordability Index, visit the National Association of REALTORS(R) site at

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Aloha & God Bless You, 

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Michelle Carr Crowe of the Get Results Team Real Estate Agent . Author . Coach . Trainer DRE #00901962 Licensed to Sell since 1985

P: Just Call ... 408-252-8900
F: 408-947-1585
1190 S. Bascom Ave., Suite #118
San Jose, CA 95128

Michelle C. Carr-Crowe and the Get Results Team (established by the late legendary Silicon Valley super agent Judy Carr) are known as the "Lynbrook and Cupertino Schools Experts." Coaching clients to success is Michelle's passion, making her and her team creative catalysts for positive change in people's lives. She is a Silicon Valley-based multi-million dollar real estate consultant, author, coach and trainer who works by referral only.

Her designations have included: Accredited Buyers Representative (ABR), Accredited Consultant of Real Estate (ACRE), Accredited Luxury Home Specialist (ALHS)Accredited Staging Professional (ASP)Certified Distressed Property Expert (CDPE),  Property Marketing Expert (PME), Real Estate CyberSpace Specialist (RECS), and Senior Real Estate Specialist (SRES).

Michelle is an internationally-published freelance writer with over 1,200 traditional articles in print and online, co-author of two books on Silicon Valley-specific real estate as well as over 68,000 blog posts on Blogger, ActiveRain, Examiner, FaceBook, Realtor, Trulia, RealBird and others. She enjoys reading, traveling, animals, nature, family, dancing, staging, consulting, coaching and praying. Check out her blog at or visit her online at or For RE$ult$ ... Just Call ... (408) 252-8900.



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Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

You really can't use 20% down as the assumption, especially in the first time home buyer market and the first time home buyer market is a large percentage of the buying public.

Jan 29, 2013 05:39 PM #1
Lanise Warrior-Johnson
Real Estate Brokers Services, Inc. - Compton, CA
Real Estate Specialist

This is great news for home buyers!  I was shocked to learn in my market, Long Beach California that from January 1 - about January 16 (when I last ran the report) that 43% of the deals that closed were conventional loans!  The buyers that I'm workign with are taking loans against their 401K to make the 20% down payment....but they realize now is the time to buy!

Jan 29, 2013 10:44 PM #2
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