Housing Affordability At Record High

The National Association of Realtors (NAR) announced that "housing affordability conditions have reached the highest level since record keeping began in 1970."

The Housing Affordability Index rose to a record high 206.1 in January. This index is influenced primarily by the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the household purchasing power. If an index of 100 is considered the "breakeven where a median-income household has exactly enough income to qualify for the purchase of a median-priced existing single-family home, assuming a 20 percent downpayment and 25 percent of gross income devoted to mortgage principal and interest payments."

NAR President, Moe Veissi, says this latest data underscores buyer opportunities in today’s market.“This is the first time the housing affordability index has broken the two hundred mark, meaning the typical family has roughly double the income needed to purchase a median-priced home!”

So, what we need to look at regarding buyers being able to get these homes is financing. The rates are at historic lows but the regulations are so tight that many potential homeowners are simply not able to get the financing they need to make the purchase. Here in Florida a purchase of a condo anywhere in the state requires a 25% deposit down. Underwriters are scrutinizing all aspects of the purchase.

Veissi says. “If access to credit improves, we could see a much more meaningful increase in home sales and broader stabilization in home prices, with modest gains in areas with stronger job growth.” Currently here in Tampa Bay, cash sales are representing over 60% of transactions. Until financing returns to being a viable option, many of these opportunities will go to the cash buyers. To explore your options, The PURTEE Team is here to help. Specializing in Tampa Bay beach real estate, we understand the market, its trends and where the opportunities are. Whether considering a purchase or listing your property, contact us today!