Affordability is one of the key factors behind how successful a real estate market is and will be. According to recent reports, homes in Alabama remain affordable – and that trend should continue into 2014. State Affordability Index Declines but Remains High The latest reading from the Alabama Statewide Housing Affordability Index (produced by the Alabama Center for Real Estate) declined from last quarter but still remains strong. The reading – 206.8 – declined 8.8% from the second quarter of 2013, and is also down by 14% compared to where we were at this point in 2012, but still remains high and well above the median rating of 100. In essence, a family with a median income of $53,600 has roughly 2.3 times the income they would need to purchase a home with a median price of $135,761. For people looking to buy homes – whether to use them as primary residences or turn them into income-producing rental properties – that is good news that bodes well for Alabama residents. It’s particularly strong given the national index is only 162.8. That means homes in Alabama are 27% more affordable than many other places in the country. What This Means for Investors The index calculates affordability for homeowners looking for primary residences, but the implications can be extrapolated for investors looking to make a purchase. Increased affordability ultimately means higher profit margins for investors who are looking to purchase homes in Alabama and turn them into rentals. There’s another dimension to it, however. Affordability is calculated in part based on household income. If household income increases, families and individuals have more income to spend on renting – which thus supports higher monthly rent rates and therefore more revenue potential. For more information on how affordability in Alabama provides potential boons for investors, contact gkhouses.com or call 205.940.6363.