Those doubting that the U.S. real estate market is on the cusp of a sustainable recovery may want to consider this: Americans have not seen a more affordable housing market since 1965. The household income required to qualify for purchasing an existing home reached $30,000 last month, the lowest level since the early 1990s, notes National Bank Financial analyst Stéfane Marion.
To put that into perspective, look at the wages the average American brings home. Mr. Marion divided the qualifying income by the average hourly earnings of employees on payrolls, which stood at $19.54 in December. His conclusion: an average household must work 1,600 hours a year to afford a home, far below the historical average of 2,700 hours. One surprising aspect of this is that two incomes are no longer essential to afford a home. Assuming a 35-hour work week, one person works 1,850 hours a year, well above the 1,600-hours minimum needed to enter the home market. “For the first time since the mid 1960s, even households composed of a single full-time wage earner can thus afford home-ownership – provided a financial institution is willing to lend them,” Mr. Marion said.
Certainly if your plans for 2012 involve a new home at The Lake of The Ozarks, our team would love to help that dream become a reality. Ebbie :)