NAR: Housing Affordability to Reach New High in 2012 

 The year 2012 is on its way to becoming the most affordable year housing has seen since recordkeeping began in 1970, according to data from the National Association of Realtors (NAR). In November, the NAR’s Housing Affordability Index reached 198.2, down 2.5 index points from October, but up 1.5 points from a year ago

The index determines affordability based on the relationship between median home price, median family income, and average mortgage interest rate. The index also assumes 25 percent of gross income is devoted to principal and interest and a 20 percent down payment would be made.  Based on data up to November, NAR also projects the index will set a record high of 194 in 2012, beating the high of 186 in 2011.

However, record affordability doesn’t necessarily translate into more homeowners.

 “Although 2012 was highest on record, the excessively tight underwriting precluded many would-be homebuyers from locking-in generational low interest rates,” explained Lawrence Yun, NAR chief economist.

NAR president Gary Thomas, added, “A more sensible lending environment that makes it easier for other financially qualified buyers to get a mortgage would allow many more households to enter the market, boosting home sales as much as 10 to 15 percent.”

While affordability is expected to see a new high in 2012, NAR expects affordability in 2013 to drop to 160. NAR noted an average of 160 means a median-income family would have 160 percent of income necessary to buy a median-priced existing single-family home.

“Rising home prices and a gradual uptrend in mortgage interest rates will offset improvements in family income, but 2013 likely will be the third best on record in terms of household buying power,” Yun noted.


You can see this article at the link posted here: NAR: Housing Affordability to Reach Record High in 2012

5 Real Estate Trends to Look For in 2013

  Predicting trends during volatile economic times in American is no easy task. However, we are going to give it our best shot. We strongly believe these are the five real estate items we should keep an eye on in 2013:

 

Demand for Housing Will Continue to Surge

The housing market has turned the corner and there is no reason to believe that buyer demand will not maintain momentum throughout 2013. Household formations shot up to boom-time levels in 2012 and are projected to increase at even a faster rate over the next twelve months. A lack of inventory will be more of a challenge to sales increases than will a lack of demand.

 Generations X and Y Will Prove They Believe in Homeownership

Contrary to what many have hypothesized over the last few years, young adults (18-35 year olds) are just as committed to homeownership as previous generations. Recent studies have shown:

• 43% already own a home
• 72% see homeownership as part of their personal American Dream
• 93% of those currently renting plan to buy a home

This, along with the increase in household formations mentioned above, makes us believe that 2013 will be the year that many of these young adults will jump into homeownership.

Click on the link posted below to continue reading the article on the trends to look for in 2013. 5 Real Estate Trends to Look For in 2013 

 The Mortgage Forgiveness Debt Relief Act and Debt Cancellation


Friends,

Important News!

For homeowners who are considering a short sale, the Congress has extended the tax forgiveness act on balances that are forgiven by the lender.
The details are here from the IRS website: The Mortgage Forgiveness Relief Act and Debt Cancellation


Call if you have questions, or know someone who is in need of a short sale.
This relief is only good until January of 2014.
Now is the time to act with an agent who knows what to do!

Ciao for Now,
Amy