Market Is More Affordable but Few Are Buying

The typical American family’s ability to buy an existing home improved throughout the nation in August, but not enough to buy a median-priced home in the Northeast or West, a real estate trade group said Monday.

Despite the improvement, existing-home sales slowed during the month because of consumer uncertainty over the economy, said Harley E. Rouda, president of the National Assn. of Realtors.

The Realtors said both mortgage interest rates and the median price of an existing home fell in August. The median price means half of the homes cost more and half cost less.

“We’re confident that home sales will pick up as we near the end of the year, with low interest rates and low inflation levels continuing to bolster the economy,” Rouda said.

The Realtors said its housing affordability index rose to 112.5 in August, up from 109.7 in July and 107.4 a year earlier.

The August reading meant that a family earning the national median income of $36,533 had 112.5% of the income needed to qualify for conventional financing covering 80% of a home with the median price of $101,800.

“A decline in the median home price and the mortgage interest rate in August caused a good increase in the index last month and has opened up the housing market to plentiful buying opportunities,” Rouda contended.