2012 A Great Year for Housing Affordability

We recently reported that national home sales reached their highest level since 2007. Now, in more good news, it turns out that 2012 was a solid year for housing affordability, too.

According to the National Association of Realtors (NAR), the overall yearly Housing Affordability Index was a strong 194, an increase from the 2011 index of 186.

The housing affordability index is based on three main factors: the average mortgage interest rate, the median family income and median home price. Any index reading more than 100 is a good sign, as it means that a family with a median-household income has enough money to qualify for a mortgage for a median-priced single-family home.

Many economists believe that higher rates of employment combined with low mortgage rates are pushing more people into the home buying market, especially in the Midwest where house hunters tend to have more buying power than in the west and east coast regions.

In a recent press release issued by the NAR, Gary Thomas, NAR president, stated that housing affordability could increase even further if banks revamped some of their current lending and regulatory policies. Stricter lending standards have made it more difficult  for borrowers to seek new loans, keeping many prospective buyers out of the market.

While no one knows exactly what 2013 will bring, the NAR is predicting that this year’s housing affordability index will remain strong.

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.