Friday, April 17, 2015
PLACERVILLE, CALIFORNIA
99 CENTS

Housing affordability reaches records in first quarter

By
From page C4 | May 18, 2012 |

Subscription Required

Thank you for reading the MtDemocrat.com digital edition. In order to continue reading this story please choose one of the following options.

Current Subscribers
If you are a current subscriber and wish to obtain access to MtDemocrat.com, please select the Subscriber Verification option below. If you already have a login, please select "Login" at the lower right corner of this box.

Subscriber Verification

Special Introductory Offer
For a short time we will be offering a discount to those who call us in order to obtain access to MtDemocrat.com and start your print subscription. Our customer support team will be standing by Monday through Friday, 8am to 5pm to assist you.

Call and Save! (530) 344-5000

If you are not a current subscriber and wish not to take advantage of our special introductory offer, please select the $12 monthly option below to obtain access to MtDemocrat.com and start your online subscription

Help?

NAR’s composite quarterly Housing Affordability Index* rose to a record high of 205.9 in first quarter, based on the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the household purchasing power. This is the first time the quarterly index broke the 200 mark; recordkeeping began in 1970.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said market conditions are optimal for homebuyers. “For those with good credit, we’ve never seen better housing affordability conditions or market opportunities than we see at present,” he said. “Although home prices are stabilizing and sales are rising, some buyers still have to jump through a lot of hoops to convince a lender that they are creditworthy, even for a mortgage that would be well within their means. This is especially true for self-employed buyers.”

Veissi noted home sales would be much higher if lending standards would return to normal.

The index shows the median income family, earning just under $61,000, could afford a home costing $325,500 in the first quarter, which is more than double the national median existing single-family home price of $158,100. The median monthly mortgage principal and interest payment for a median-priced home would take only 13.5 percent of gross income.

A companion index measuring the ability of first-time buyers to purchase a home also set a record, with the first-time buyer index reaching 135.8 in the first quarter.

Assumptions for the first-time buyer index include a lower income, at 65 percent of median family income, a starter home costing 85 percent of the median price, and a downpayment of 10 percent. This index means the typical entry-level buyer could afford a home costing $182,500, which is well above the overall median price.

“It’s never been easy to buy a first home because of the cash required for downpayment and closing costs, but conditions for first-time buyers who are able to get a mortgage have never been better,” Veissi explained.

Most first-time buyers choose a loan with a lower downpayment, often an FHA-insured loan with 3.5 percent down, and some use the VA program with no downpayment.

Both home prices and mortgage interest rates are expected to edge up modestly as the year progresses, but housing affordability will remain very favorable with the median-income household well positioned to afford a median-priced home. For all of 2012 the index is projected to set an annual record, averaging 191 for the year.

The National Association of Realtors, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

*A composite index of 100 is defined as the point where a median-income family household has exactly enough income to qualify for the purchase of a median-priced existing single-family home, assuming a 20 percent down payment and 25 percent of gross income devoted to mortgage principal and interest payments.

Comments

comments

  • Recent Posts

  • Enter your email address to subscribe and receive notifications of new posts by email.

  • .

    News

    Georgetown wildfire contained

    By Cole Mayer | From Page: A1

     
    Heard over the back fence: Glow in the dark walk

    By Bob Billingsley | From Page: B1

    Harris found guilty of first-degree murder

    By Cole Mayer | From Page: A1 | Gallery

     
    Closing arguments attempt to sway jury

    By Cole Mayer | From Page: A1

    Geyser erupts on Main Street when service line separated

    By Wendy Schultz | From Page: A1 | Gallery

     
    Grand Jury asks CSD to amend parcel tax

    By Julie Samrick | From Page: A3

    SLT to hold Citizen’s Academy

    By Cole Mayer | From Page: A8

     
    Pondo queen on to state competition

    By Julie Samrick | From Page: A11

    .

    Opinion

     
    Something to think about: The sound of the gun

    By Wendy Schultz | From Page: A4

    Main Street ‘under construction’

    By Mountain Democrat | From Page: A4

     
    .

    Letters

    The water problem is not going away

    By Letters to the Editor | From Page: A5

     
    Animal Shelter vs. human shelter

    By Letters to the Editor | From Page: A5

    Animal Shelter Open House

    By Letters to the Editor | From Page: A5

     
    Supervisor Ranalli unresponsive

    By Letters to the Editor | From Page: A5

    Are you really trying for a hole in one?

    By Letters to the Editor | From Page: A5

     
    Foundation thanks Board of Supervisors

    By Letters to the Editor | From Page: A5

    .

    Sports

    Beam’s laser wins it for El Dorado

    By Jerry Heinzer | From Page: A6

     
    Many winners at conference finale

    By Mike Bush | From Page: A6 | Gallery

    Roundup: April 15, 2015

    By Democrat Staff | From Page: A6 | Gallery

     
    Dwarf cars join tomorrow’s action

    By News Release | From Page: A6

    D’backs pull even with Cordova

    By Jerry Heinzer | From Page: A6

     
    El Dorado dominates Rosemont

    By J. Cool McSmooth | From Page: A7

    .

    Prospecting

    Art Studio 360 celebrates opening

    By News Release | From Page: B1 | Gallery

     
    Things to do: April 17, 2015

    By Democrat Calendar | From Page: B2

    Imagine images of spring and more

    By Placerville Arts Association | From Page: B2 | Gallery

     
    The Ramblin’ Years returns to its roots

    By Julie Samrick | From Page: B3

    Patrons Club serves up scholarship lunch

    By Folsom Lake College | From Page: B4

     
    Fabulous Liars playing at Lions Club opening

    By Fabulous Liars | From Page: B4

    ‘Cloud Nine’ offers surprises

    By Harris Center for the Arts | From Page: B4

     
    Step into the past

    By Folsom Historic District Association | From Page: B6

    Artist mixes architecture and paint

    By Placerville Arts Association | From Page: B7

     
    Connecting the nature of humans through dance

    By News Release | From Page: B7

    .

    Essentials

    .

    Obituaries

    Alden “Al” Stoddard funeral notice

    By Contributor | From Page: A2

     
    Vickey Christine Moreno

    By Contributor | From Page: A2

    Allen H. Tuttle

    By Contributor | From Page: A2

     
    Steven Allen Chasen

    By Contributor | From Page: A2

    Robert Joseph Gatlin Jr. funeral notice

    By Contributor | From Page: A2

     
    .

    Real Estate

    Why I hate home inspections

    By Ken Calhoon | From Page: HS2

     
    Pillow talk part two: Picking the perfect sheet

    By Marni Jameson | From Page: HS4

    .

    Comics

    Shoe

    By Contributor | From Page: A9

     
    Sudoku

    By Contributor | From Page: A9

    Rubes

    By Contributor | From Page: A9

     
    TV Listings

    By Contributor | From Page: A9

    Long Story Short

    By Contributor | From Page: A9

     
    Speed Bump

    By Contributor | From Page: A9

    Tundra

    By Contributor | From Page: A9

     
    Horoscope, Friday, April 17, 2015

    By Contributor | From Page: A10

    New York Times Crossword

    By Contributor | From Page: A10

     
    Horoscope, Sunday, April 19, 2015

    By Contributor | From Page: A10

    Horoscope, Saturday, April 18, 2015

    By Contributor | From Page: A10

     
    .

    Home Source

    Why I hate home inspections

    By Ken Calhoon | From Page: HS2

    Pillow talk part two: Picking the perfect sheet

    By Marni Jameson | From Page: HS4