What you need to earn to buy now
Stagnating home prices since the recession may frustrate home sellers, but there’s a flip side. Thanks to lower or stable price trends -- and to declining interest rates -- homes in the Washington region are still becoming more affordable. These maps show home affordability by answering the question: What’s the yearly income needed to qualify for a mortgage to buy the typical home sold? That income threshold has declined since 2007 in all 252 shaded Zip codes. In just the past year, homes have become more affordable in almost 200 Zips. For detailed breakdowns by Zip code and comparison with 2011 prices: wapo.st/realestatemap
Methodology: This measure of affordability starts with the median home sale price for the past year. The sale years end in August of each year. It assumes a down payment of 20 percent, a 30-year mortgage and that payments for principal and interest do not exceed 25 percent of income. Interest rates were the national average contract mortgage rate for the purchase of previously occupied homes for June of each year, reported by the Federal Housing Finance Board.
Because this measure of affordability is not based on repeat sales, changes may be due to differences in the types of homes being sold at different points in time, as well as to changes in market values and interest rates.. By Ted Mellnik and Laura Stanton - The Washington Post.