Remember when the overheated housing market made it almost impossible for anyone to buy their first home?
Well, those days are definitely over.
During the first three months of 2009, nearly 73% of all homes sold were considered affordable for families earning the $64,000 national median income, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.
That’s the highest percentage in the 18 years the index has been published.
The primary reason is that home prices are falling across the country. (It certainly isn’t because family incomes are rising.)
Home values fell an average of 20% from their 2006 peak through the end of 2008 and are expected to drop another 15% to 20% this year. Indeed, the latest report from the National Association of Realtors says the median sales price for homes sold in April was 15% lower than in April 2008.
As a result, the number of homes that the median income family can afford has steadily risen from 53.8% in the first three months of 2008, to 62.4% in the final three months of 2008, to the record high of early 2009.
That’s why first-time homebuyers were able to buy more than half of all the homes sold in March, and more than 40% of all those bought in April.
Indianapolis remains the most affordable major housing market for the 15th consecutive quarter. Almost 95% of all homes sold were deemed affordable to households earning the area’s median family income of $68,100.
The New York-White Plains-Wayne, N.Y.-N.J. region — where only about 21% of homes sold in the first quarter were affordable to those earning the median income of $64,800 — was deemed the least affordable area.