Since 1970 the National Association of REALTORS has been tracking this index. Earlier this year we reached the all time record high for this index! As of September, 2011, Utah’s index is at 168!
The index is designed to show the relationship between the median income and the median home price, it also takes into consideration the current interest rate. To put it more simply the index represents the percentage of the median income needed to purchase a median price home. In other words, in Utah right now, a family earning a median income makes 168% of what is required to purchase a median priced home.
Why is this important? Well first off it’s good news in the sense that more people can afford to be homeowners. This is especially important when you consider that current studies are showing that it’s more expensive to rent than to own! Secondly, if a median income family wants to buy a median priced home they will be spending less per month on that home than they would have just a few short years ago!
With decreasing inventories, home prices stabilizing, and interest rates at historic lows, coupled with this record high Housing Affordability Index; it really is a great time to buy a home!