As residential real estate sectors across America continue to strengthen, a number of areas are reporting continuously increasing home prices as inventory levels show declines. While the rising figures may be of concern to some, data shows that housing is still largely affordable, and the majority of consumers.
According to the recently released National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), nearly 74 percent of existing- and new-homes which were sold to individuals between early January and late March of this year were affordable to families earning $64,400 - which is the national median income. While this figure is down slightly more than one percentage point on a quarterly basis, as the fourth quarter of 2012 saw affordability at almost 75 percent, the reading is still largely positive for consumers and housing professionals alike.
"Thanks to very favorable mortgage rates and prices, housing affordability has remained quite high over the past four years," said Rick Judson, chairman of NAHB. "The HOI has not slipped below 70 since the end of 2008. That said, from a builder's perspective, it should be noted that rising costs for building materials, lots and labor are making it somewhat more expensive to construct new homes in today's market."
Considerable affordability was observed nationwide, with the top-ranking cities being seen in West, Midwestern and Eastern regions. However, the Lakeland-Winter Haven metropolitan area ranked as the third-most affordable market, achieving a reading of more than 92 percent during the latest business quarter.
Evidence ongoing of recovery outlined in Housing Scorecard
Just as many consumers have been keeping an eye on local real estate records, government organizations have been monitoring the progress of the recovery of the national economy and housing market. The release of the April edition of the Obama Administration's Housing Scorecard by the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury showed gains in homeowner equity and hikes in property values.
Treasury assistant secretary for financial stability Tim Massad said a significant number of consumers were able to avoid repossession due to the assistance made available by various programs, effectively reducing the number of foreclosed houses which are currently populating the market.
"The Administration's programs continue to offer struggling homeowners some of the most sustainable relief available to prevent foreclosure," said Massad. "These programs have paved the way for millions of additional families to get help with their mortgage payments while setting better standards for the mortgage industry."