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Rates, Home Prices Increase Affordability Levels
Saturday, February 20, 2016
Both lower home prices and decreasing interest rates contributed to an increase in home affordability during the fourth quarter of 2015 according to the National Association of Home Builders (NAHB). The NAHB/Wells Fargo Housing Opportunity Index (HOI) rose from 62.2 percent in the third quarter to 63.3 percent in the fourth.
The HOI number measures the percentage of homes sold during each quarter that were affordable to families earning the U.S. median income. That median income was $65,800 in Q4. Meanwhile the median home price of homes sold from October 1 through year end was down to $226,000 from $231,000 in the third quarter. During that period the average mortgage interest fell 9 basis points to 4.09 percent.
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