Monday, October 20, 2014
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

.

News

King Fire salvage operations continue

By Dawn Hodson | From Page: A1

 
Camino manhunt ongoing

By Cole Mayer | From Page: A1 | Gallery

Psychiatrist: Winkler has disorders

By Cole Mayer | From Page: A1 | Gallery

 
Motorcycle fatal on Omo Ranch Road

By Cole Mayer | From Page: A1

 
McClintock fired up over fire and water

By Chris Daley | From Page: A1 | Gallery

Planning Commission halts Town Center apartments

By Julie Samrick | From Page: A3

 
Officials warn of jury duty warrant scam

By News Release | From Page: A3

.

Opinion

The balancing act: Figuring out the ballot

By Larry Weitzman | From Page: A4

 
Belltower: Oakland Aviation Museum

By Michael Raffety | From Page: A4

No to Prop. 45

By Mountain Democrat | From Page: A4

 
.

Letters

A double-edged opportunity for Cameron Park

By Letters to the Editor | From Page: A5

 
Kirk Smith for City Council

By Letters to the Editor | From Page: A5

Measure K

By Letters to the Editor | From Page: A5

 
Measure K goes too far

By Letters to the Editor | From Page: A5

Vote Penn for smart economic development

By Letters to the Editor | From Page: A5

 
Disappearing signs

By Letters to the Editor | From Page: A5

A bully

By Letters to the Editor | From Page: A5

 
.

Sports

Roundup: Oct 17, 2014

By Democrat Staff | From Page: A6

 
Union Mine jumps back in the saddle

By Scott Warden | From Page: A6

Cougar boys keep it rolling

By Mark Devaughn | From Page: A6 | Gallery

 
Golden Sierra runs out of time

By Cody Holliday | From Page: A6

Volleyball: El Dorado sweeps Griz

By Jerry Heinzer | From Page: A6

 
Schedule: Oct. 20-25, 2014

By Democrat Staff | From Page: A6

 
Oak Ridge drops third straight; playoffs in peril

By Jerry Heinzer | From Page: A7

Bruins’ 4th quarter lead slips way

By Mike Bush | From Page: A7

 
.

Prospecting

Dedication unites two kindred spirits

By Pat Lakey | From Page: B1 | Gallery

 
Juvenile Service Council is holding a golf tourney

By Juvenile Service Council | From Page: B2

As we were: All shook up

By Ken Deibert | From Page: B2

 
New CD celebrates a life in Placerville

By Mike Roberts | From Page: B2 | Gallery

Food bank to hold hunger walk

By Food Bank Of El Dorado County | From Page: B3

 
High school district delivers 21st century classrooms

By El Dorado Union High School District | From Page: B3

Old Sac continues Day of the Dead celebration

By Old Sacramento | From Page: B4

 
Fantasy glides on the ice

By Disney On Ice | From Page: B10 | Gallery

 
.

Essentials

Crime Log: Oct. 7-11

By Cole Mayer | From Page: A2

 
Correction

By Cole Mayer | From Page: A2

Building permits 10/6-10/2014

By Michael Raffety | From Page: A2

 
.

Obituaries

.

Real Estate

.

Comics