Newspaper article THE JOURNAL RECORD

Housing Affordability Index Increases 1.1%

Newspaper article THE JOURNAL RECORD

Housing Affordability Index Increases 1.1%

Article excerpt

WASHINGTON (AP) - An index measuring the ability of the typical family to afford to buy a home rose to its highest level in more than eight years in October, a real estate trade group said Monday.

The National Association of Realtors said its affordability index climbed 1.1 percentage points to 108.1, the highest it has been since May 1978.

The index means a typical family earning $28,956 annually had 108.1 percent of the income necessary to qualify for a mortgage on a home selling for $79,700, the median price for an existing home sold in October.

The index assumes a 20 percent down payment with the monthly mortgage payment equal to 25 percent of family income. In October, the mortgage payment for a median priced home would have taken just 23.1 percent of a typical family's income.

The improvement stemmed from a continued decline in mortgage rates with the average effective interest rate on existing homes dipping to 9. …

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