It’s more affordable than ever to buy a home, but restrictive lending requirements are preventing many potential homeowners from taking advantage of the bargains.
U.S. housing affordability rose to its highest level on record in the three months of the year, according to figures released last week by the National Association of Home Builders (NAHB) and Wells Fargo , besting the previous record set in the last quarter of 2011.
Over three-quarters of all new and used homes sold in the first quarter of the year were deemed affordable for a family earning the U.S. median income of $65,000. A home is deemed affordable under the formula if a family pays no more than 28 percent of its monthly income on mortgage payments, assuming a 10 percent down payment.
Tight credit limiting sales
“Homes in this year’s first quarter were more affordable than they have been at any time in more than 20 years, yet many potential sales are not happening because of overly tight lending conditions that are keeping hardworking families from obtaining a suitable mortgage,” said Barry Rutenberg, NAHB chair. “Without this significant hurdle, the housing and economic recovery could be proceeding at a much stronger pace.”
An estimated 77.5 percent of homes sold in the first quarter of the year were deemed affordable to a family earning the median income, up from the previous record of 75.9 percent in the last quarter of 2011.
Indianapolis most affordable big market
The most affordable major housing market in the United States was found to be the Indianapolis/Carmel, Ind. area, where 95.8 percent of all homes were affordable for a family earning the local median income of $66,900…
Leave Your Response
You must be logged in to post a comment.