Housing affordability is up nationwide due to low interest rates and home prices as National Homeownership Month begins in June, according to a recent release from the National Association of Home Builders (NAHB).
The latest NAHB/Wells Fargo Housing Opportunity Index released in mid-May reports that about two-thirds of new and existing homes sold in the first quarter of 2015 were affordable to families that earned $65,800, which is the U.S. median yearly income, according to NAHB. Meanwhile, the median home price nationwide dropped by $5,000 from the fourth quarter of last year to the first quarter of 2015 (from $215,000 down to $210,000) while interest rates dropped from 4.29 percent down to 4.03 percent during the same time frame.
In addition to lower prices and interest rates, low-down payment programs offered by Fannie Mae and Freddie Mac can help creditworthy borrowers who cannot afford a large downpayment qualify for a mortgage. These programs offer downpayments as low as 3 percent for eligible first-time homebuyers.
"Now is a great time for consumers to buy homes," said NAHB Chairman Tom Woods, a home builder from Blue Springs, Missouri. "Both first-time and move-up buyers can take advantage of these favorable market conditions and start building their American Dream."
Homeownership carries with it financial benefits, according to the NAHB, since it is often a primary source of net worth and a step toward accumulating long-term personal financial assets. Homeowners can also deduct mortgage interest and property taxes paid from their taxable income, which can result in thousands of dollars in savings, particularly in the first few years of a mortgage when the largest percentage of the monthly mortgage payment is made up of interest.
Benefits of homeownership are not just financial, however, according to Woods.
“Homeownership builds stronger communities, provides a solid foundation for family and personal achievement and improves the quality of life for millions of people,” Woods said.