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Market Tightens, With Mortgages Still Out of Reach for Many

The Movoto inventory data comes as other housing industry groups say housing affordability set historical records in 2012.

According to the Washington, D.C.-based National Association of Realtors, the NAR's Housing Affordability Index landed at 198.2 in November, the most recent month measured by the association.

That's up from 186 the year before, which set a record in its own right, the NAR reports.

"Although 2012 was highest on record, the excessively tight underwriting precluded many would-be homebuyers from locking in generational low interest rates," says Lawrence Yun, NAR's chief economist. "Rising home prices and a gradual uptrend in mortgage interest rates will offset improvements in family income, but 2013 likely will be the third-best on record in terms of household buying power."

"A window of opportunity remains open for buyers who can qualify for a mortgage," he adds.

One issue that could restrict housing affordability, and it's not a new one, is tight mortgage credit. Banks and mortgage lenders still aren't stepping up to the plate and making loans to otherwise solid borrowers.

"A more sensible lending environment that makes it easier for other financially qualified buyers to get a mortgage would allow many more households to enter the market, boosting home sales as much as 10% to 15%," explains Gary Thomas, president of the NAR.

That would really drive home prices up, the NAR says.

With lower inventories already stoking the home value fire, the 2013 spring selling season should be as active a market as the housing industry has seen in years.

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