Home Affordability on the RIse
Tuesday, November 27, 2012
The National Association of Home Builders has stated that 74.1% of all homes that were sold between the months of June and September for 2012 were affordable to families whose income was the national median. This data is generated by the quarterly Home Opportunity Index (HOI) which reached 70 for the 15th consecutive quarter. Before the streak, the affordability index had never been so high. The prior high mark was in 1999’s first quarter, at 69.4% in relation to 2007, where the HOI was only 42.0%. Raising the affordability of homes in turn boosts home sales.
The monthly costs of owning a home have dropped significantly to levels where homes are becoming less expensive to own than to rent in many major cities, even with rent rates rising. In addition, more than 4.5 million jobs have been added to the economy since 2010, giving renters buying confidence to own a home. Since the housing market bottomed in October 2011, housing development has been on the rise giving more prospective home buyers more purchasing power.