Home sales have reached record levels for four consecutive years, and experts expect 2005 to continue the trend. But, a recent study also shows that while home prices may be increasing, they are actually becoming more affordable, and now may be the best time to make the big purchase.

Whether you are a first-time homebuyer or entering the marketplace as a repeat buyer, you need to know what you want to buy, and if you can afford it.

With a median family income of $55,239, the National Association of Realtors’ composite Housing Affordability Index shows that a typical family would have 131 percent of the income necessary to buy the median existing home at $187,500.

The association said declining mortgage interest rates and rising family income helped improve affordability conditions.

The index measures affordability factors for all homebuyers making a 20 percent down payment, with an index of 100 defined as the point where a median-income family has the exact amount of income needed to purchase a median-priced existing home.

“The median-income family is very well positioned to buy a median-priced home in most of the country,” said David Lereah, the association’s chief economist.

“Favorable housing affordability conditions are coinciding with a need and desire to buy into the American dream of homeownership,” Lereah added.

The association estimates that almost eight million new and existing homes were sold during 2004. While the mortgage rates are expected to rise in 2005, the association still expects over seven-and-a-half million new and existing-home sales in 2005.

“Mortgage interest rates will be rising very slowly, so potential home buyers will have ample opportunity to get into the market this year,” said Al Mansell, president of the National Association of Realtors. “Housing remains the soundest investment a family could make.”

For additional home buying tips go online to www.realtor.com.