Wed, November 19th, 2008
ALABAMA HOMES LESS AFFORDABLE

The affordability of homes in Alabama dropped nearly 8 percent in the third quarter compared to the previous quarter, while it rose nearly 2 percent in the Birmingham area, according to the Alabama Center for Real Estate at the University of Alabama.

The statewide housing affordability index dropped to 154.4 in the third quarter of this year, compared to 167.4 in the second quarter.

An index of 100 means a family earning the state’s median income can qualify for a loan on a median-priced home in the state, therefore the higher the index the more affordable the housing, said the center in a news release.

The decline was a result of an increase in the median sales price of Alabama homes from $132,420 to $139,591 and an increase in the composite monthly interest rate to 6.39 percent from 6.12 percent in the second quarter, the report stated.

The center said the drop in the state’s housing affordability is far better than the third quarter national average of 127.1, which is a slight drop from 127.7 in the second quarter.

In Birmingham, the index registered 157 during the quarter, up nearly 2 percent from 154.2 in the second quarter.

Birmingham was one of three reported metropolitan areas in Alabama that saw an increase in affordability.  The two others included the areas of Anniston and Montgomery. 

Excerpts from Birmingham Business Journal – by Lauren B. Cooper

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