Last year was probably one of the most affordable years ever to buy a house as prices bottomed and mortgage interest rates hit record lows, according to an industry group.
The National Association of Realtors reported that 2012 will probably go down as a record year for housing affordability, according to its affordability index. That measure, which is calculated based on the median home price, family income and the average mortgage interest rate, stood at 198.2 in November.
The higher the index number, the more purchasing power available to consumers. A reading of 100 is the point at which a family with a median income can afford a median-priced home, presuming a 20 percent down payment.
For the entire year of 2012, the group projects the index will hit an average of 194, the highest it has been since recordkeeping began in 1970.
While homes may be affordable and mortgage interest rates low, 2012 was also marked by low inventory, steep competition for homes and tight mortgage lending standards. These conditions shut out many families still struggling from the recession. Many of the most successful buyers were firms and investors paying cash for properties.