Elgin Fox Valley, IL – Surprise! Nationwide sales of homes sailed past the 2.6% estimate and rose to 3.4% in March exceeding the benchmark by over 1%.
The National Association of Realtors indicated that the harsh winter diminished sales but this uptick indicates a positive outlook for the ongoing spring and summer market, even though the Affordability Index has tightened.
What’s an Affordability Index?
The National Association of Realtors has created an index of median home prices, median family income and average mortgage interest rate. The ideal or perfect level is exactly 100. This number rises and falls as the associated factors change throughout the year. The closer it sits to 100, the more the medians meet the requirements, and more people can buy the average home. The higher the number rises, the fewer will be able to qualify. Generally, the Monthly Housing Affordability Index shows if a typical family has enough income to qualify for a mortgage loan on an average home, both nationwide or locally, based on the most recent monthly price and income data.
How does this Index affect your home buying power?
Essentially, the higher the number rises above 100, the less buying power the median home purchasers has. The closer or lower the number is to 100, the more affordable the homes are and the buyer can afford to buy more. While the Index offers a general gauge on the overall health of the real estate market buying power, but Fox Valley homeowners and buyers should not use it as a final decision maker for whether or not to buy or sell. Each person’s individual situation is different. If your income falls on the median, the numbers may fall into place easier for you. However, indexes and economy gauges do not take into consideration your personal situation, such as income level, or the ZIP code of homes that you prefer to move into. However, other factors such as family size, a new job, relocation for work or financial distress have a greater impact on a person’s individual buying power.
Ask a Realtor today about the market conditions in your neighborhood and find out more! Let’s make a move!
Jennifer Kinzle, e-Pro,
Charles Rutenberg Realty, Elgin Fox Valley
The highest compliment I can receive is a referral from friends and clients!