Does the Record High Housing Affordability Index Mean the Housing Market Will Improve?
(3/7/2012 - Austin, Texas) Today the National Association of Realtors (NAR) announced that January 2012’s housing affordability index was at an all time high of 206, meaning that the average family has double the income needed to purchase a home. An index of 100 means that a household has exactly enough income to purchase a median priced single family home assuming a 20% down payment and 25% gross income devoted to the mortgage.
The NAR projects that this index will remain over the 200 point mark for the remainder of the year. But will this record high housing affordability index have any impact on the housing recovery?
“For buyers who can qualify for a mortgage, now is a very good time to become a homeowner,” says Mr. Veissi, President of the National Association of Realtors.
Phill Grove, the REI Maverick and the real estate trainer known for creating the Assignment of Mortgage Payments System, isn’t optimistic that this record breaking index will have much impact.
“As Mr. Veissi stated above, this is a great time to buy a house IF you can qualify for a mortgage,” states Mr. Grove, owner of Love American Homes, a real estate company that has closed on more than 1,200 real estate transactions totaling more than $200 million since 2003. “Unfortunately, banks aren’t lending, so the average person still cannot procure a mortgage. “
The price of the homes and the housing affordability index does really matter, rather, it’s the ability of the home owner to procure a mortgage that will allow the real estate market to get back on it’s feet again.
“The solution to improving the housing market is more competition in the form of selling a home (deed) while the seller keeps the existing mortgage in place,” continues Mr. Grove. “This assignment of mortgage note will allow a seller who has little, no, or even negative equity in a house to sell at market price to a buyer who otherwise cannot obtain a conventional mortgage.”
Utilizing the assignment of mortgage payments system to take the stagnant banks out of the real estate equation will allow the buyers, sellers, and real estate professionals who embrace the assignment of mortgage payments system to take advantage of the financial benefits presenting itself by the record high housing affordability index.
For more information on Phill Grove, please visit his official blog at www.REIMaverick.com.
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