Home affordability rose to its highest level in at least 20 years in the fourth quarter of 2010, according to an index released by the National Association of Home Builders and Wells Fargo today.
The Housing Opportunity Index found that 73.9 percent of new and existing homes sold in the fourth quarter were affordable to families earning the national median income of $64,400 — surpassing the previous high, 72.5 percent, recorded in the first quarter of 2009.
"Today’s report shows that housing affordability at the end of 2010 was at its highest level since we started computing the HOI," said Bob Nielsen, NAHB’s chairman, in a statement. "However, while this is good news for consumers, both homebuyers and builders continue to confront extremely tight credit conditions, and this remains a significant obstacle to many potential home sales."
Before 2009, the index had never hit 70 percent and rarely topped 65 percent, the association said. Last quarter was the eighth straight quarter the index was above 70 percent.