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National index shows housing affordability surges at year-end

Staff Report • Feb 24, 2009 at 12:00 AM

The Housing Wire is reporting that in the wake of falling home prices, Nationwide housing affordability surged at the end of 2008 to its highest level in at least five years. That data comes from the National Association of Home Builders /Wells Fargo & Co. Housing Opportunity Index.The HOI indicated that 62.4 percent of all new and existing homes that were sold in the final quarter of 2008 were affordable to families earning the national median income of $61,500, up considerably from the 56.1 percent of homes that were affordable to such families in the previous quarter and the 46.6 percent of homes that were affordable to them at the end of 2007.“Falling home prices and very favorable mortgage rates both contributed to the housing affordability gains we saw in the fourth quarter of 2008,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “However, at the same time, worsening economic conditions, historically low consumer confidence and uncertainty about future home prices kept many qualified buyers on the sidelines.”

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