Residential International Sales Increase $16 Billion. Kbr Kitchen & Bath

Housing affordability conditions for all buyers reached a milestone in the first quarter

, in accordance with the Countrywide Association of Realtors.

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

NAR President Moe Veissi, broker-owner of Veissi & Associates, in Miami, said market conditions are optimal for home buyers. "For those with good credit, we've never seen better housing affordability conditions or market opportunities than we see at this time," he says. "Although home prices are stabilizing and sales are rising, some buyers still have to jump through many hoops to convince a lender that they're creditworthy, even for any mortgage that will be well within their means. This can be especially true for self-employed buyers."

Veissi noted home sales could 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 house costing $325,500 in the very first quarter, which is a lot 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 acquire a home also set a record, with the 1st-time buyer index reaching 135.8 in the 1st quarter.

Assumptions for the 1st-time buyer index include a lower income, at 65 percent of median family income, a starter home costing 85 percent of the median price, along with a downpayment of 10 percent. This index means the everyday entry-level buyer could afford a house costing $182,500, and that is well above the general median price.

"It's never been easy to buy a primary home due to cash required for downpayment and closing costs, but conditions for first-time buyers who are going to get yourself a mortgage have never been better," Veissi explains.

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

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

Contact our home remodeling contractor today for a free consultation.

KBR Kitchen & Bath

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Fairfax, VA 22030

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by: ada8jrouma

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