So far, 2012 looks to have been a record year for housing affordability and for buyers who could get a mortgage, according to the National Association of Realtors (NAR).
Having collected 11 months of data in 2012 thus far, NAR’s Housing Affordability Index (HAI) reported a reading of 198.2 in November, prompting the association to project a record high of 194 to close out the year.
Finishing with a level of 194 would put the index up from its reading of 186 in 2011, reports NAR.
Although November’s reading was 2.5 index points below October’s, NAR affirms a rating increase of 1.5 points for the month on a year-over-year basis.
“Rising home prices and a gradual uptrend in mortgage interest rates will offset improvements in family income, but 2013 likely ill be the third best on record in terms of household buying power,” said NAR’s Chief Economist Lawrence Yun.
The projections for 2013, though still high, do not represent the same record-breaking levels.
NAR expects its index to average a level of 160 during 2013, which means on a national basis that a median-income family would have 160% of the income needed to purchase an average-priced existing single-family home.
“Although 2012 was highest on record, the excessively tight underwriting precluded many would-be homebuyers from locking-in generational low interest rates,” said Yun.
Data for existing-home sales in December 2012 is scheduled to release January 22, according to NAR.
Written by Jason Oliva