There Has Literally Never Been A Better Time To Buy A Home In America

Rob Wile

2013-01-25T22:01:00Z

You hear it all the time from ads and realtors. But this time it's actually true: there has literally never been a better time to buy a home.

According to the latest data from the National Association of Realtors, the home affordability index has now entered its third year of record highs.

The measure tracks median income against median priced homes (assuming a down payment of 20 percent of the home price and it assumes a qualifying ratio of 25 percent).

A value of 100 means that a family at median income has exactly enough income to qualify for a mortgage on a median-priced home. When it's above 100, the family has more than enough income to qualify.

And the current reading is just under 200.

But we wanted to dig in to why housing conditions in America are so ripe for buying.

Mortgage rates are at all-time lows.

The average mortgage payment is far less than the average rent.

The labor market is also improving, which means home owners are more likely to make their mortgage payments.

Income growth has kept pace with rising home prices.

And the price-to-income ratio has stabilized.

Existing homes remain the way to go — they're still at a huge discount compared with new homes.

And most cities also have huge discounts on foreclosures.

However, there's evidence the new homes market is is becoming more favorable for buyers. Starts have outpaced sales, which means there's slack.

In general, most of America east of the Mississippi remains a huge buyer's market.

Blue=higher buyer's market index, red lower.

Here are the top buyer's markets according to Zillow's index, which includes # days on market, recent price cut volume and sales-to-list price ratio. There are some pretty high-end places on this list.

Meanwhile, we know buyers are sensing that our once-in-a-generation buying window is closing...

In some markets, half a dozen couples will show up to bid on a new home, like this one in SoCal.

(Click here to read that story.)

Indeed, new home sales are slowly catching up to interest in buying a new home.

And some folks predict home prices could jump nearly 10 percent in 2013.

For more housing news...

Check Out The 12 States Where Homeowners Remain Deep Underwater >

Home Price Home Prices Housing

More...