Home Affordability Hits Record

Home affordability hits record
If you can afford to do so, now may be time to buy that house. Not only are prices significantly down from their housing-boom peaks, but home affordability is at an all-time high, according to trade group, the National Association of Realtors.
The group has recently released its Housing Affordability Index, which shows that in February, the index increased 0.9 percentage points from January to 173.5, a record high since NAR began tracking the index in 1970. February's level is 36.3 percentage points than that of February 2008, according to NAR.
The index, which measures housing affordability, examines the relationship between home prices, mortgage interest rates and family income. February data shows that a median-income family earning $59,700 a year can now afford a $285,600 home by putting down a 20 percent down payment (assuming 25 percent of their gross income is put toward mortgage principal and interest), NAR says. The home such a family could afford is now much greater than the median existing single-family home price, which was $164,600 in February.
Last year, the same family could only afford a home priced at $265,600, NAR says.
"If you have a good job and long-term plans, it's unlikely that you'll find a much better time to buy a home. This is especially true for first-time buyers who can qualify for an $8,000 tax credit this year, have a great selection of homes to choose from, and are in a favorable negotiating position," says NAR President Charles McMillan.
http://www.cyberhomes.com/content/blog/09-04-09/Home_affordability_hits_record.aspx