Housing Affordability at 18 Year Low!

By Jeff • May 20th, 2009

On Monday, the 18th of June, the National Housing Affordability index, developed by NAR,  increased 10% during the 4 months of 2009, the highest it has been in 18 years since the conception of the model. One of the upsides of the current market condition is affordable housing in Minnesota and this is why.

What is the Housing Affordability Index? The Housing Affordability Index, or HAI, is a model that provides a way to monitor housing affordability. HAI looks at the median priced home, median family income, and mortgage rates and determines if a median income family can qualify for a mortgage. If the median income home buyer has sufficient funds for purchase the HAI index value is 100. As of 5/12 of this year, the Housing Affordability Index was 1.73, which means the median household has 173% of the income needed to qualify for an average mortgage on the median home. In 2006 and 2007, Minnesota Housing Affordability Index was fluctuating between 1.00 and 1.09.  This means there has been an explosion in housing affordability. The climb from 2006 to 2009 has be nothing less than an explosion. However seeing a 10 percentage jump during the first quarter of 2009 alone is simply amazing. With the first time home buyer $8,000 tax credit, lower interest rates and home prices it is the right time to buy a lake home or buy property of any kind.

Housing Affordability - National Info

Housing Affordability - National Info

References:

Affordable Housing Real Estate Resource: Housing Affordability Index

National Association of Realtors: Economics and Research Division

Minnesota Housing Partnership: Affordability Index

Comments(4) Real Estate News

Comments

By snasype on May 25th, 2009 at 2:23 am

Hi, courteous posts there :-) through’s exchange for the gripping advice

By Phil Gleason on June 29th, 2009 at 3:47 pm

This is very curious that they say that so many more can afford homes now while so many have lost there jobs and the outlook for the average homeowner is so bleak. It would seem contrary to conventional wisdom. I suppose time will tell but then I am of the belief statistics are often bent in favor of the creator.

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