The following article is written by Philadelphia's Somers Team! If you have ever wondered about the Housing Affordability Index and what it means, Stephanie and Chris give a great explanation on what it is.
And, if you are sitting on the fence waiting to purchase a home, I highly recommend you read this article! It is terrific!
Housing Affordability Index is at Record High in 2009
What does that mean to you ? Simple ! This is probably the best time to purchase a property in your lifetime, especially if you are a first time homebuyer ! Even though interest rates have climbed, it is still a great time and historically those rates are still very low. We also believe that rates will continue to trend up over the course of the next year or two due to the risk of inflation. The signs are already there with the price of crude oil, gold, copper and all the commodities up dramatically in the last couple of months combined with the weakness of the dollar. With all the money Uncle Sam has printed, inflation is really the only outcome that can happen.
In any event, I digress. What is this affordability index that I am talking about? It has been around for 40 years believe it or not but it is just not mentioned a lot. According to Buck Wargo "The index is a measure of housing affordability over time by examining home prices, mortgage interest rates and family income. The National Association of Realtors (NAR) index dates back to 1970." According to the stats, a record was set in February of this year when the index hit 174.4. Thus, housing affordability has hit a level that has not been seen in over 40 years since NAR has tracked it !!
I think that this index will start to get more national attention. In the past, this data has been used more so by government analysts than by Realtors and consumers. With information like this available, I would think that Realtors will start to discuss it more with their clients and consumers will be inquiring about it more so as well.
More info can be seen at NAR's website at NAR's Affordability Index .
Also, the index is broken down by year, month and region - see NAR - Housing Affordability Index .
So if you have not bought a house yet this year, what are you waiting for ?
Fast forward 3 to 5 years, I think we will be seeing higher real estate prices as well as higher mortgage rates.
What do you think ? Please share your thoughts with a comment regarding the Housing Affordability Index or the opportunity (or lack of if you believe) in the housing market in general. Also, if you have not subscribed yet to our blog, what are you waiting for ? Is just a click away !
If interested in buying or selling properties in Philadelphia, contact Chris and Stephanie Somers at email@example.com or 215-400-2612 . You can connect with us on Facebook and Twitter . For investment properties, check out our new investor site at Philly Investor Hub !
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Areas of specialty include Northern Liberties, Old City, Center City, Fishtown, Graduate Hospital, Art Museum, Queen Village, Pennsport, Old Kensington, Port Richmond, Bridesburg, Society Hill, Loft District, Spring Garden and more !