When a Negative is not a Negative….and Misc News by Tim McLaughlin
Housing affordability dipped slightly during the second quarter according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI). The data shows that 73.8% of all new and existing homes sold in the second quarter were affordable to families earning the national median income of $65,000, down from a record high 77.5% of homes that were affordable to median income earners as of the first quarter.
This is not necessarily bad news as the decrease in affordability is largely attributable to rising home prices in metropolitan areas across the country. 92% of the MSAs covered by the NAHB survey saw an increase in median home prices between the first and second quarters of the year.
NAHB Chairman Barry Rutenberg said, “While interest rates and overall housing affordability remain very favorable on a historic basis, the decline in the latest HOI is a positive development because it is another signal that the housing recovery is starting to take root, and it lends needed confidence to prospective buyers and sellers who have been reluctant to move forward in the current marketplace.”
The HOI computes affordability using an area’s median income during a specific quarter, the price of new and existing homes, and mortgage financing conditions including interest rates on fixed-and adjustable rate loans.
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Total existing-home sales rose 2.3% to a seasonally adjusted annual rate of 4.47mm in July, up from 4.37mm in June, according to new data from the National Association of Realtors (NAR). July’s level is 10.4% above the 4.05mm unit pace in July 2011.
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Homeowners could soon have an easier time selling their homes for less than what they owe on their mortgages, under new guidelines from a federal housing regulator and mortgage-finance giants Fannie Mae and Freddie Mac.
The Federal Housing Finance Agency on Tuesday announced measures to make “short sales” of underwater homes easier for homeowners, including extending help to people who have financial difficulties but haven’t missed mortgage payments.
