Home > Blogs > Nevada > Clark County > Las Vegas > Home Affordability Now At Historically Favorable Levels

Aneta Ivanova's Blog

By Aneta Ivanova | Agent in Las Vegas, NV

Home Affordability Now At Historically Favorable Levels

Home Affordability Now At Historically Favorable Levels



Housing affordability conditions for all buyers are faring well so far in 2012 showing a modest increase nationally is all regions but one. The National Affordability Index is based on the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the overall household purchasing power. Nationally the index reached 183.80 representing a 4.14% increase from this time last year.


The largest year over year increase was posted in the Northeast at 5.79% however with an index level of 155.40, well below the national average. This is due partially to the Northeast having the highest median home price in the nation at $250,800 and the highest qualifying income requirement. 


Following close behind was the Midwest with a 5.17% rise posting the highest affordability in the nation at 223.90. This mark which is more than double the minimum qualifying income and 21.82% above the national level is due to the Midwest having the lowest median sales price ($148,700) and lowest percentage of income P&I payment (11.2%).


The South fared equally well with a 4.61% gained posting an index of 190.60, the most in-line with the national average of all regions. The lowest mortgage rates in nation were a contributing factor in the South's very reasonable affordability level, as well as stable median home prices.


The only region to post a decline, albeit marginally at -0.20%, was the West which came in at 146.90. The West has recently seen an increase to median home prices which contributed to significantly low affordability levels, as well as having the highest percentage of income P&I payment (17%) and the highest mortgage rates (3.99%).

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer