Both Home Prices and Affordability on the Rise

The spring market will likely be a hotter one this year, as low interest rates and a healthier economy lure more home buyers to the marketplace.

“Interest rates below 4 percent, rising rents, and healthier local job markets are convincing more consumers to consider home ownership,” Chris Polychron, National Association of REALTORS® president, said in a recent news release showing fourth-quarter 2014 home prices moving up.

An increase in the national family median income (to $65,782) mixed with low interest rates slightly improved affordability in the fourth quarter compared to the previous quarter, NAR reports. Affordability improved despite the national median single-family home price moving up to $208,700 in the fourth quarter, an increase of 6 percent year-over-year.

“Low interest rates helped preserve affordability last quarter, but it’ll take stronger income gains and more housing supply to help meet the pent-up demand for buying,” says Lawrence Yun, NAR’s chief economist.   Please provide comments about your area!

Source: National Association of REALTORS®