Jun 02

Affordability Reaches Highest Level in 20 Years

Homes are more affordable to more families, according to the latest index for the first quarter of 2011 that shows affordability reaching its highest level in more than 20 years.

Nearly 75 percent of all new and existing homes sold in the first quarter of 2011 were affordable to families earning the national median income of $64,400, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index. The previous high was set in the fourth quarter of 2010 with 73.9 percent.

“With interest rates remaining at historically low levels, today’s report indicates that home ownership is within reach of more households than it has been for more than two decades,” says Bob Nielsen, chairman of the National Association of Home Builders.

The most affordable metro housing market in the nation? Syracuse, N.Y., in which 94.5 percent of all homes sold were affordable to households earning the area’s median family income of $64,300.

Other metro cities ranking high on the affordability index were Youngstown-Warren-Boardman, Ohio-Pa.; Indianapolis-Carmel, Ind.; Warren-Troy-Farmington Hills, Mich.; and Toledo, Ohio.

Meanwhile, the least affordable major housing market for the first quarter of 2011 was New York-White Plains-Wayne, N.Y.-N.J.

Source: “Housing Affordability Rises to Record Level, Tight Financing Continues to Constrain Sales,” National Association of Home Builders (May 25, 2011)

Jun 02

Buyers Better Hurry: Rates Reach New Lows

For the sixth straight week, fixed mortgage rates inched down, reaching new lows for 2011. The 30-year fixed-rate mortgage averaged 4.60 percent this week while the 15-year mortgage averaged 3.78 percent, Freddie Mac reports in its weekly mortgage market survey.

Meanwhile, the National Association of Home Builders reported this week that home affordability reached its highest level in 20 years, making the purchasing power for home buyers even better during this traditionally prime buying season.

Here’s a closer look at mortgage rates:

  • 30-year, fixed-rate mortgage: Averaging 4.60 percent this week, it was down slightly from last week’s 4.61 percent average. Last year at this time, 30-year rates averaged 4.84 percent. The 30-year fixed rate mortgage hasn’t been under this week’s 4.60 percent average since early December 2010 when it fell to 4.46 percent.
  • 15-year, fixed-rate mortgage: Averaging 3.78 percent this week, it also was down from last week’s 3.80 percent average. Last year at this time, the 15-year fixed-rate mortgage averaged 4.21 percent. It has not been under this week’s 3.78 percent average since late November 2010 when it fell to 3.77 percent.
  • 5-year adjustable-rate mortgage: Averaging 3.41 percent this week, it was down from last week’s 3.48 percent average. A year ago at this time, the 5-year ARM averaged 3.97 percent.

Source: “Fixed Mortgage Rates Continue to Find New Lows,” Freddie Mac (May 26, 2011)