NEW YORK (CNNMoney..com) — The Great Recession has ravaged savings and boosted unemployment rates, forcing people become more conservative with their cash. It has also made homes a lot more affordable — at least for those people still working.
The typical American family, making the nation’s median income of $64,000 a year, could afford to buy 70.1% of all homes sold in the United States during the third quarter, according a quarterly report from the National Association of Home Builders (NAHB) and Wells Fargo (WFC, Fortune 500).
That’s down slightly from the previous quarter, when 72.3% were considered affordable, but way up from the third quarter of 2008 when only 56.1% qualified.
The NAHB judges a home to be affordable if a family making the metro area’s median income could buy it if they devote no more than 28% of their take-home pay toward housing costs.Read the rest of this entry »
The government’s definition for a first time home buyer is surprisingly a mis-nomer. The President’s stimulus program which he signed last week applies to a broader range of buyers defined as follows:
First-time homebuyers are people who have not owned a home in the previous three years. Repeat buyers must have owned their current home at least five years.
Finally, Congress understood that our economy’s recovery depends on the recovery of housing and jobs market.
Congress has voted overwhelmingly to extend the $8000 tax credit to first time homebuyers for another 7 months and expanded the program to avail $6500 to secondary home buyers. This means that investors will get a boost in purchasing investment properties.
