Buying a home is now more affordable than it has been in the last twenty years.
That is, according to this CNN article. Due to declines in home prices and nearly record-low mortgage rates, the National Association of Home Builders/Wells Fargo Housing Opportunity Index now registers a record level of affordability.
According to the index, 75.9% of all new and existing homes sold during the three months ended Dec. 31 could have been comfortably purchased by families earning the national median income of $64,200.
That was the highest percentage recorded in the 20-year history of the index, and a sharp increase from just three months earlier when 72.9% of all homes sold were considered affordable.
The National Association of Realtors reported that in January, home prices fell to their lowest point in more than a decade, which has helped to lift the pace of home sales. The median home price in January fell 2% from December to $154,700. That's the lowest since November 2001, before the run-up in home prices that eventually crashed the market.
The pace of sales rose to the highest level since May of 2010. The seasonally-adjusted annual sales pace of 4.57 million homes was up a bit from the revised 4.38 million in December. The last time homes sold at that pace, buyers were rushing in order to qualify for the $8,000 homebuyer's tax credit as it was about to expire.
Unfortunately, despite the affordability and apparent signs of recovery, most Americans are having trouble buying a home. The main reason is that potential home buyers are finding it extremely difficult to qualify for mortgages due to tightened lending standards. Borrowing troubles are even...