Home Affordability Still HighYou keep hearing it over and over again…it’s a buyers’ market. Prices are down, inventory is high, interest rates keeps decreasing and all of the determining factors make buying a house these days possible. Americans, even with the current real estate market, still believe in home ownership. For many, buying and moving into a home is still the American Dream.
According to the National Association of Home Builders/Well Fargo Housing Opportunity Index, home affordability levels are at record high. They say that in today’s real estate market 72.6% of all new and existing homes sold in the second quarter of 2011 were affordable to families earning about $59,000 in income. Smaller real estate markets saw even more of an affordability percentage.
Even with the best of certain factors in the real estate market, there are still some like tight credit conditions that scare off certain home buyers as well as home builders. So even though home are extremely affordable these days, the real estate market is still seeing declines in existing home sales. July 2011, for example, has seen a decrease of about 3.5% compared to just the month before.
Certain areas are doing better than others, such as the Midwest that saw a one percent increase in existing home sales but it’s still nothing to brag home about. The Northeast saw a 2.7% increase.
The National Association of Realtors say that on average an existing home, meaning not newly built, is going for the average price tag of $174,000. That is actually down from 4.4% compared to last year. Distresses homes still make up a third of the real estate market these days.
The delinquency rate for mortgage loans is still increasing but not by much, just about 8%. So people are still struggling but it’s not as bad as it was a year ago. Home foreclosure rates are also declining.
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