NAR’s composite Housing Affordability Index
was 131.8 during the fourth quarter of 2004, up 2.9 percentage points from 128.9
in the third quarter, and 5.0 points below the same period a year earlier, when
it stood at 136.8.
index shows the nation’s typical household had 131.8 percent of the income
needed to purchase a home at the fourth quarter median existing-home price,
which was $187,500. This index measures affordability factors for all homebuyers
making a 20 percent downpayment, with an index of 100 defined as the point where
a median-income family has the exact amount of income needed to purchase a
median-priced existing home. The fourth-quarter median family income was
projected to be $55,239.
does this mean? It means that
most people can afford a median-priced house. As they say, all real estate is