Rochelle Allison

Home affordability has reached the highest peak since 1970, which is when the data was first recorded, according to National Association of Realtor’s(NAR) housing affordability index.

The index rose to 206.1 in January, and an index of 100 is defined as the point where a median-income household has exactly enough income to qualify for the purchase of a median-priced single-family home, assuming a 20 percent down payment and 25 percent of gross income for mortgage principal and interest payments.

The Oracle of Omaha has finally made it to the cover of Time magazine. It’s a first, which seems long overdue, considering Warren Buffett’s investment wizardry and, increasingly, his outspoken willingness to talk straight about everything, including the future of the American economy.
"Once we get back to a million housing starts per year”– the current tally is 685,000 — “I think pundits will be surprised just how fast unemployment will come down in this country,” he says. “There are 4 million people hitting age 22 every year in this country. Sure, you can double up on households for a while, but at some point, hormones kick in, and living with your in-laws loses its allure.” Buffett notes that nearly every one of his major non-housing businesses has had several strong quarters, and Berkshire companies are making a record number of investments, the vast majority of which are in the U.S. “I am 100% sure that people in this country will be doing more business 10 years from now than they are today." ...
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Interest rates continue to be at an all-time low!

The number of housing markets showing measurable improvement nearly doubled in January, with the addition of 40 new metros to the Improving Markets Index put out by First American and the National Association of Home Builders (NAHB).

The index tracks housing markets that are showing signs of improving economic health based on three independent datasets – employment growth from the Labor Department, home price appreciation from Freddie Mac, and single-family housing permits from the Census Bureau. The index identifies metropolitan areas that have shown improvement from their respective troughs in employment, home prices, and housing permits for at least six consecutive months.

The following 40 metros were added to the Improving Markets Index this month:

• Florence, Alabama
• Tuscaloosa, Alabama
• Fayetteville, Arkansas
• Denver, Colorado
• Greeley, Colorado
• Bridgeport, Connecticut
• New Haven, Connecticut
• Cape Coral, Florida
• Jacksonville, Florida
• Punta Gorda, Florida
• Honolulu, Hawaii
• Ames, Iowa
• Des Moines, Iowa
• Dubuque, Iowa
• Elkhart, Indiana
• Indianapolis, Indiana
• Lafayette, Indiana
• Lake Charles, Louisiana
• Worcester, Massachusetts
• Grand Rapids, Michigan
• Lansing, Michigan
• Monroe, Michigan
• Minneapolis, Minnesota
• Columbia, Missouri
• Joplin, Missouri
• Fargo, North Dakota
• Manchester, New Hampshire
• Cincinnati, Ohio
• Oklahoma City, Oklahoma
• Tulsa, Oklahoma
• Corvallis, Oregon
• Erie, Pennsylvania
• Philadelphia, Pennsylvania
• Chattanooga, Tennessee
• Clarksville, Tennessee
• Nashville, Tennessee
• College Station, Texas
• Dallas, Texas
• Victoria, Texas
• Madison, Wisconsin

While relatively small metropolitan areas continue to dominate the list, several major metros in diverse parts of the country were added this month, including Dallas, Denver, Honolulu, Indianapolis, Nashville, and Philadelphia.

The full list now stands at 76, with 31 states and the District of Columbia all represented by at least one entry. The current tally is up from 41 in December. Five metros on the list in December were dropped from the index in January. These included Anchorage, Alaska; Fort Wayne, Indiana; Canton, Ohio; Scranton, Pennsylvania; and Charleston, West Virginia.

According to Bob Nielsen, NAHB chairman, the list would be much stronger, were it not for restrictive lending and growing inventories of distressed properties in certain markets.

NAR released its latest pending home sales index figure last week and for the second month in a row the index is up. But more than that, the index has broken 100. This is significant because the only time since the housing boom collapsed that the index has broken 100 is when the home owner tax credit was in effect. The fact that the index has returned to that level a year since the credit has been in effect means the housing market is strengthening completely on its own, without any stimulus.

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