Tuesday, January 24, 2023 / by Amy Brown
For the first time in many, many months we are seeing the housing affordability index rise instead of decline for the region. This is great news as we needed some relief from rising prices, especially in the mid range index.
The housing affordability index is a measurement comparing the median household income required in order to purchase the average priced home in the region under the current interest rates. For example, an index of 120 means the median household income was 120% of what is necessary to qualify for the median-priced home under prevailing interest rates. A higher number means greater affordability.
We hit an all-time affordability low last year at an index of 61. Today, we are on the rise as the market stabilizes and as of the end of December are at an index of 66. While this may not seem like much, it is a sign that prices are coming down to accommodate the interest rate hikes in order to create a purchasing balance again.
This result is evident in today's new listings as we have more mid-priced homes on the market than ever before at an average price of $267/sf, down from $350/sf just a few months ago.
Prices are dropping! It's a great time to buy!