Housing affordability hit its highest point since 1970 in January at 206.1, according to the National Association of Realtors’ Housing Affordability Index. This continued an upward trend that started toward the end of 2011, according to Inman News.
The index has been steadily climbing since 2009, when it was at a level of 169.4. It finished 2010 at 174 even and climbed as high as 197.9 in 2011.
NAR calculates the index every month using current median home prices, median family income and average mortgage interest rates; a higher score mean greater affordability. The index was designed to measure the affordability of a median-priced, existing single-family home by a median-income-earning family.
A score of 100 indicates a family can exactly afford that type of home, including a 20 percent down payment and mortgage payments at 25 percent of the family’s gross income.
The January figure marks the first time the index has matched or exceeded 200 since NAR rolled it out in 1970.