NAHB: With affordability up, home buyers are starting to return to the marketMortgagePress.comNAHB, home builders, home buyers, Joe Robson, U.S. Census Bureau
Thanks to record low mortgage rates and declining home prices,
55 million families--or half of all U.S. households--can afford
today's $200,000 median-priced new home, according to figures
released by the National Association of Home Builders (NAHB).
"That's an increase of 17 million households from conditions
just two years ago and the best housing affordability number we
have seen in years," said NAHB Chairman Joe Robson, a home builder
from Tulsa, Okla. "We are now seeing the first signs that buyers
are returning to the marketplace."
Based on data from the U.S. Census Bureau comparing home prices,
mortgage rates and minimum income needed to purchase a
median-priced home in February 2007 and February 2009, a typical
family today can purchase a house with $20,000 less in household
income and save nearly $500 per month on their principal, interest,
taxes and insurance. The number of households that can afford to
purchase a home today is 55.4 million, compared with 38.4 million
two years ago, according to figures compiled by NAHB.
Single-family permits were up 11 percent in February, new and
existing home sales also posted gains and the huge inventory
backlog is being slowly whittled down. In a survey for Century 21
Real Estate last month among prospective first-time home buyers who
indicated they were likely to purchase a home in the next two
years, a majority--78 percent--said that now is a good time to buy
a home. Of those responding to the online poll, 68 percent said
that now is a better time to buy than six months ago.
Another sign that consumers are considering jumping back into
the housing market is the growing interest in the $8,000 first-time
home buyer tax credit included in the recently enacted economic
stimulus package. During February and March, 1.5 million visitors
logged on to NAHB's consumer Web site,
www.federalhousingtaxcredit.com, to learn more about the tax
credit. Further, a new survey commissioned by Move, Inc. found that
nearly 20 percent of those who plan to purchase a home this year
are doing so to take advantage of the tax credit, which expires at
the end of November.
"With home values in many markets at the lowest level since
2003, an $8,000 tax credit available to first-time home buyers,
fixed-rate mortgages under five percent, and an outstanding
selection of homes to choose from, buyers are starting to recognize
that this has the makings for a one-time opportunity to break into
the market," said Robson.
Construction of an additional 500,000 single-family homes--the
difference between today's anemic construction rate and one that
would move closer to meeting the underlying demand for
housing--would generate 734,000 jobs and $35 billion in wages in
the construction industry and another 790,000 jobs and $37.7
billion wages in manufacturing, trade, and service sector jobs, he
For more details on how lower prices and interest rates during
the past two years have spurred a significant uptick in
affordability, click here.
For more informaiton, visit www.nahb.com.