WASHINGTON -- Single-family homes were more affordable in November than at any time in the last 17 1/2 years, a report issued yesterday by the National Association of Realtors says.
The trend is expected to continue, because the Federal Reserve Board has acted since then to encourage even lower interest rates.
As usual, existing single-family homes were most affordable in the Midwest and South. But the report said that even in the Northeast and West, more families than usual could find affordable homes.
"The current affordability conditions -- low interest rates and relatively soft home prices -- are such that, if the economy were improving, the housing market would be going through the roof," said John A. Tucillo, chief economist for the 750,000-member Realtors group.
Most economists believe that worries about job security during hard times are keeping many families from deciding to buy houses they can afford.
In November, the typical family could afford payments on a house that cost 24.5 percent more than the typical home. That was the highest the monthly "housing affordability index" of the Realtors has been since May 1974.
The report covered trends in mortgage rates, median family incomes and median home prices. At the median, half are higher and half are lower.
Two trends helped buyers:
* The average interest rate for mortgages fell in November to 8.7 percent, down 1.3 points in a year.
* Median family income rose in November to $36,584, up $1,326 in a year.
One trend helped sellers:
* The resale price for a single-family home was $97,800. Though below the high of $103,600 reached in July, that was still $5,800 above the median price in November 1990.
Over the one-year period, the lower interest rates and higher incomes far outweighed the rise in the cost of homes. The typical monthly mortgage payment dropped by $32 a month, down to $612.
In the Midwest, median family income rose to $37,780. An income of only $23,714 would be enough to qualify for a mortgage with payments of $494 on a home costing the median price of $77,700.
In the South, median family income was $32,919. An income of only $26,502 would cover payments of $552 on a home costing the median price of $87,300.
But in the Northeast, the median family income slid to $40,216. That was below the $42,229 income level needed to qualify for a mortgage with payments of $880 monthly for the region's median-priced home, which cost $138,000.