Increasing home prices brings affordability index in June down; Still affordable though, especially in the Midwest
Dennis Norman
By: Dennis Norman
The National Association of REALTORS(R) has been reporting and tracking a “Housing Affordability Index” since January 1989. The index looks at whether or not an average family (an income equal to the median income) can qualify for a loan to buy a median-priced home.
The Housing Affordabiity Index for June was at 159.2 meaning that a family with an average income has 159% of the income they need to afford an average house. This is down from the revised index for January of this year of 176.9 which makes January the month housing was the most affordable since the National Association of REALTORS(R) began this index 20 years ago. Median home prices have increased 10% since January, rising from $164,200 to $180,600 in June, which has led to the degradation in affordability.
Of the four regions in the U.S. the Midwest is leading the way in affordability with an affordability index of 188.50. The Northeast is the least affordable region coming in at 127.9.
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