Housing Affordability

As reported by CNNMoney.com - "Homes still affordable - really affordable":

Homes continue to be more affordable than they have been in nearly two decades.

The typical American family, making the nation's median income of $64,000 a year, could afford to buy 72.3% of all homes sold in the United States during the second quarter, according a quarterly report from the National Association of Home Builders (NAHB) and Wells Fargo (WFC, Fortune 500).

That's off just a tad from the record 72.5% reached during the first three months of 2009, but up substantially from the second quarter of 2008 when only 55% of homes sold were affordable.

The measure of housing affordability was calculated as follows:

The NAHB judges a home to be affordable if a family making the metro area's median income could devote no more than 28% of their take-home pay toward housing costs.

Dramatically lower housing prices, Federal / local housing incentives and home buyer credits, and historically low interest rates have made a huge dent in housing affordability.

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