2012 was a record year for the housing industry, setting an annual record for favorable housing conditions and for buyers obtaining a mortgage.
According to the National Association of REALTOR’s housing affordability index
, this past year will surpass 2013’s projected average of 160, as it stood at 198.2 in November with only eleven months of data reported. The reason? NAR President, Gary Thomas, explains that the rise in home prices and anticipated increase in mortgage rates may offset this year’s numbers. Thomas also states that affordability levels are conditional upon a more sensible lending environment, particularly the regulatory policies in the mortgage and banking industries.
“A more sensible lending environment that makes it easier for other financially qualified buyers to get a mortgage would allow many more households to enter the market, boosting home sales as much as 10 to 15 percent,” he added. *The Housing Affordability Index calculates median home price, median family income and average mortgage interest rate, and assumes a 20 percent down payment and a 25 percent qualifying ratio (principle and interest payment to income).