Since 1970 theÂ National Association of RealtorsÂ (NAR) has tracked home affordability providing an index based on percentage for the current affordability of housing across the country. With an index of 100 percent, a family with median income has exactly the income level to qualify for a median-priced home with a down payment of 20 percent and then 25 percent of their gross income to carry a mortgage. This does not include homeowners insurance or taxes.
Recent data has the index at its highest level since the record keeping began atÂ 206.1. It has never exceeded the 200 percent level and indicates that the median-income family or household has twice the income needed to qualify under the terms outlined above. Still a volatile market, NAR has said it expects the index to remain at this level through 2012.
I am still finding inventory flat in the Plymouth MA and Cape Cod markets and finding homes for key client buyers has been a matter of checking the market daily for any new listings. The indication is that we are getting back to a healthy market mix of inventory vs. sales but no one I talk to will really believe this yet. If credit approvals increase and rates remain where they are â€“ we might just see some signs of a more stable market. Nationally jobs will be a key factor as well. In Plymouth and Cape Cod the job market is a bit better than nationally.
Hereâ€™s hoping for a robust spring market for buyers and sellers.
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John F. Muscarella
River Farm Properties, LLC