Home Affordability Reaches Five Year High

Washington, DC, Feb. 20, 2009--Nationwide housing affordability surged at year-end to its highest level in at least five years, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), released today.
 
The HOI indicated that 62.4 percent of all new and existing homes that were sold in the final quarter of 2008 were affordable to families earning the national median income of $61,500, up considerably from the 56.1 percent of homes that were affordable to such families in the previous quarter and the 46.6 percent of homes that were affordable to them at the end of 2007.
 
“Falling home prices and very favorable mortgage rates both contributed to the housing affordability gains we saw in the fourth quarter of 2008,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla.

“However, at the same time, worsening economic conditions, historically low consumer confidence and uncertainty about future home prices kept many qualified buyers on the sidelines.
 
"Looking forward, we hope that the newly improved first-time home buyer tax credit, included in recently enacted economic stimulus legislation, will help spur buyer demand, and that government efforts to reduce foreclosures will put a floor under declining home values.”