According to NAR’s Housing Affordability Index, the U.S. experienced historic highs in housing affordability over the past several years. While homeownership is still more affordable today than in decades past, the latest data show higher mortgage rates and home prices have pushed affordability below a year ago.
NAR’s Housing Affordability Index measures household buying power based on the relationship between median family income, median home price and average mortgage interest rate.
Nationally, affordability is down from 203.7 in October 2012 to 165.4 in October 2013. Regionally, affordability is up from last month in all regions except the Northeast, which experienced a 5 percent dip. Mortgage rates are also up 25.8 percent from last year; however, they are still near historic lows.
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Affordability wasn’t the only changing dynamic in real estate in 2013. Low mortgage rates, all-cash buyers and tight inventories touched off bidding wars amid the housing market’s recovery. Take a look back at 2013’s hottest trends and get experts' predictions for 2014 at http://realtor.com/2013review.