Low mortgage rates and stabilizing incomes are keeping home affordability high and giving home buyers “ample buying power,” according to the National Association of REALTORS®.

The Wall Street Journal highlights the following example on just how affordable housing has become: “Assuming a 5 percent down payment, a 3.5 percent mortgage rate, and 25 percent of a gross income devoted to mortgage payments, a buyer would only need an income of $36,500 to buy a house at the median price. With a 10 percent down payment, the required salary falls to $34,600, and with a 20 percent down payment, it falls to $30,700.”

In the first quarter, the median family income nationwide was $62,200.

Housing affordability remains high despite recent reports that show home prices in 150 U.S. cities saw their biggest year-over-year gains in more than seven years, according to NAR’s most recent report, reflecting data from the first quarter of 2013. The median price of a single-family, existing home was $176,600 in the first quarter of this year, an increase of 11.3 percent from year ago levels, NAR notes.

Source: “Home Prices Jump but Affordability Remains in Buyers’ Favor,” The Wall Street Journal (May 9, 2013)

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