P.M. BRIEFING : Purchasing Power Improves for First-Time Home Buyers
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WASHINGTON — Declining mortgage rates and lower prices for starter houses gave first-time home buyers greater purchasing power during the fourth quarter of last year, the National Assn. of Realtors said today.
The association’s first-time home buyer affordability index measured 74.4 during the three-month period ended in December, an improvement from a rating of 71 in the previous quarter.
That means that typical first-time buyers had 74.4% of the income needed to qualify for a starter home.
The relief may be short lived, however, as interest rates have pushed upward during the first quarter.
John Tuccillo, the association’s chief economist, said the return of higher interest rates this quarter should make it even more difficult for first-time home buyers to qualify for a loan.
First-timers will have to be “more inventive to get into the housing market,” Tuccillo said.
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