Housing Affordability At Record High Level For Third Consecutive Quarter
According to the National Association of Home Builders/Wells Fargo Housing Opportunity Index, nationwide housing affordability, bolstered by affordable interest rates and low house prices, hovered for the third consecutive quarter near its highest level since the series was first compiled 18 years ago.
The Index showed that 70.1 percent of all new and existing homes sold in the third quarter of 2009 were affordable to families earning the national median income of $64,000, down slightly from a near-record 72.3 percent during the previous quarter and up from 56.1 percent during the third quarter of 2008.
NAHB Chairman Joe Robson, a home builder from Tulsa, Oklahoma, noted that the extension of the home buyer Federal tax credit (to April 30, 2010) together with low interest rates “will encourage even more home buyers to enter the market and help stabilize housing and the economy by creating new jobs, stimulating home sales, reducing foreclosures, cutting excess inventories, and stabilizing home prices.”
NAHB also reported that the 55+ Single-Family Housing Market Index, based on a survey of builders who produce housing designed to meet the needs of mature consumers, showed a six-point increase in the third quarter of 2009, to a seasonally-adjusted level of 21. That is the highest level recorded since the inception of the series in the fourth quarter of 2008, though still considered a fairly weak number.
Each of the 55+ Single-Family Housing Market Index components rose between the second and third quarters of 2009. The component gauging present sales conditions increased four points to 19, while the component gauging sales expectations for the next six months rose nine points to 32 and the component measuring traffic of prospective buyers increased seven points to 19.
“As the home buyer tax credit stimulated sales among first-time buyers and stabilized home prices in many areas, older households were able to sell their existing homes and pursue a home in a 55 plus community,” said David Crowe, NAHB’s chief economist. “The recent extension and expansion of the tax credit should extend the domino effect from first-time buyers and expand the effect by providing a credit to repeat buyers as well.”