Northern Virginia Housing Affordability Index

Attention Buyers:  Most Buyer-Friendly Level in Years
The DC-MD-VA Affordability Index is at its most buyer-friendly level in years.  The index is presently 147 (meaning the typical buyer generally earns 47% more income than required to qualify for a mortgage to purchase a typical home in the DC metro area).  The current score is 14% more affordable than the historical average of 129 in the DC metro area and well off the unaffordability lows (upper 70’s) experienced in the lead up to the 2007 housing market top.

DC Affordability Index

About the Index
The National Association of Realtors (NAR) regularly tracks a multitude of housing data nationally and within every region of the country.  Using the most recent housing prices and income data, the Housing Affordability Index measures whether or not a typical family generally earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels.  A reading of 100 is considered equilibrium – typical family income is considered adequate to qualify for a mortgage at current housing prices.  The further the index goes above 100 is considered more affordable, while below is considered less affordable.  The data sets supporting this particular infographic concentrate on the region in which I work with my clients – the Northern Virginia area, including Fairfax, Arlington, Loudoun and Prince William counties.

Aligning Technical Signals
In addition to the favorable Affordability Index, there are other technical signals real estate brokers and agents are experiencing in the current market that suggest it’s a great time to consider buying a home.  While relatively low housing inventory levels remain in place – producing a relative seller advantage, houses are sitting on the market longer producing softer absorption rates and a more frequent incidence of price reductions by sellers before homes go under contract.  In addition, this past July was the first time in three years that the percentage of homes selling above list price declined, which also coincided with the decreased incidence of multiple offers being experienced.  There a several signals aligning for buyers in today’s market that suggest it’s a great time to consider buying.  Please contact me if you’d like to explore the opportunities!

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