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Metro Phoenix is one of the

U.S.'s "10 hottest housing

markets to watch in 2015,"

according to a new Realtor.com

report. 

The real estate website's chief economist, Jonathan
Smoke, said Phoenix's potential for income growth
and new-home construction landed it on the list.
"Phoenix consistently hammers home market growth
through new construction. The sprawling desert city
continues to see an increase in overall population and
household growth. Household growth is anticipated to
increase by 7 percent over the next five years,"
>ccording to Smoke's report.

Smoke's comment about the Valley's new-home market will surprise some because the region's homebuilding market has yet to recover from the crash. The latest data from Phoenix-based RL Brown Reports shows homebuilding is down 15 percent from last year's slower-than-expected pace. Smoke's list is made up of cities he expects will see the strongest housing growth, affordable prices and fast-paced sales. Realtor.com doesn't rank its top 10 cities. The rest of the areas expected to see the most housing growth in 2015, alphabetically: Atlanta, Dallas, Des Moines, Denver, Houston, Los Angeles, Minneapolis, San Jose and Washington, D.C.

 

 

Housing Affordability Index to Set Annual Record

 

by ROBERT on JANUARY 11, 2013 AILY REAL ESTATE NEWS | WEDNESDAY,

 

JANUARY 09, 2013 With 11 months of data reported, 2012 will clearly go down as a record year for favorable housing affordability conditions and a great year for buyers who could get a mortgage, according to the National Association of REALTORS®.

 

NAR’s national Housing Affordability Index stood at 198.2 in November, based on the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the household purchasing power; recordkeeping began in 1970. An index of 100 is defined as the point where a median-income household has exactly enough income to qualify for the purchase of a median-priced existing single-family home, assuming a 20 percent downpayment and 25 percent of gross income devoted to mortgage principal and interest payments.

 

For first-time buyers making small downpayments, the affordability levels are relatively lower. For all of 2012, NAR projects the housing affordability index to be a record high 194, up from 186 in 2011, which was the previous record. November’s reading was 2.5 index points below October, but up 1.5 index points from a year earlier. Lawrence Yun, NAR chief economist, said home buyers are able to stay well within their means. “Although 2012 was highest on record, the excessively tight underwriting precluded many would-be homebuyers from locking-in generational low interest rates,” he said. “Rising home prices and a gradual uptrend in mortgage interest rates will offset improvements in family income, but 2013 likely will be the third best on record in terms of household buying power.

 

A window of opportunity remains open for buyers who can qualify for a mortgage.” NAR projects the housing affordability index to average 160 during 2013, which means on a national basis that a median-income family would have 160 percent of the income needed to purchase a median-priced existing single-family home. Conditions vary widely, with the highest buying power in the Midwest. Even in the West, where the regional index is lower, they typical family is well positioned in most markets.

 

NAR President Gary Thomas said the minor erosion in affordability conditions moving forward could be mitigated by bank and regulatory policies. “Clearer rules from the government regarding future lawsuits and buybacks of Fannie and Freddie loans could encourage banks to use their massive cash holdings to originate more loans, Thomas said.

"A more sensible lending environment that makes it easier for other financially qualified buyers to get a mortgage would allow many more households to enter the market, boosting home sales as much as 10 to 15 percent," he added.

Source: NAR

 

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