Low rates, prices push home affordability to record levels

The headlines have recently screamed about record low mortgage rates and soft home prices. How does this translate into affordability for potential buyers?

The Housing Affordability Index – a gauge designed to track how affordable a median priced home is to a median income family – has been hovering at its highest levels in history.

In short, the higher the index the more affordable the median priced home is for the median income family. November’s index was the second highest on record. The highest index on record was the previous month, October 2011.

Affordability is only one aspect potential homebuyers are likely to consider when deciding whether now is the right time to purchase. Family situation, work situation, and the desire to own a home are all considerations that motivate buyers.