Housing affordability improves in March

Housing affordability improved once again in March as both home prices and mortgage rates declined, California real estate consultant John Burns said in his U.S. Building Market Intelligence report.

According to his Housing Cycle Barometer, affordability reached its best level since he began tracking the index in 1981.

The housing-cost-to-income ratio has fallen to just 26 percent, compared with 44 percent at the peak of this housing cycle.

Declining mortgage rates have played a major role in the improvement of affordability. The 30-year fixed mortgage rate was at 4.85 percent at the end of March, the lowest level in more than 40 years.

The median-home-price-to-income ratio has also fallen precipitously, reaching 3.3 after peaking at 5.1 in 2005, and is now much more in line with the historical average of 3.7.

Median existing home prices in Las Vegas fell to $134,900 in March, down 41.3 percent from a year ago, Las Vegas-based SalesTraq reported. Home values are down by more than 50 percent from their peak in 2006.

The Mortgage Bankers Association reported a slight decrease in the share of adjustable-rate mortgage applications, which reached 1.4 percent in the last week of March and remains extremely low when compared to peak levels above 35 percent of total loans in early 2005.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.