Housing affordability rose to its highest level in nearly 30 years in the fourth quarter as falling interest rates and lower median prices made it easier for more Americans to purchase a home, a real estate industry group said Friday.

The National Association of Realtors (NAR) said its housing affordability index rose to 146.8 in the fourth quarter of 2001 from 137.4 in the third quarter. It marked the highest level since 1973 when housing affordability was 147.9.

The index has risen 13.4 points, or 10 percent, since the fourth quarter of 2000 when the index stood at 133.4.

The NAR Housing Affordability Index measures the ability of a family earning the median income to buy a home at the median price.

When the NAR index measures 100, a family earning the median income -- the level at which there are an equal number of families both above and below -- has exactly the amount needed to buy a single-family home at the median price, using conventional financing and a 20 percent downpayment.

"Low interest rates have been opening the door to low- and moderate income buyers, allowing many new families to become homeowners," said NAR President Martin Edwards.

The housing market has remained strong even as the economy struggles to recover from a recession that began in March and was further battered after the September 11 attacks in Washington and New York.

A rash of recent housing data shows low interest rates and lean inventories continue to spur purchases of homes by U.S. consumers.

The Commerce Department said on Monday that new homes were sold at a seasonally adjusted annual rate of 946,000 last month, up from a revised 895,000 pace in November.

The average new home sales level in 2001 was 900,000, 2.6 percent above the 877,000 volume for 2000. The annual figure is the highest since the government began keeping track in 1963, and exceeds the 1998 high of 886,000.

And the NAR said in a separate release last week that sales of existing homes in 2001 were a record 5.251 million units.

The median price of a single-family home in the fourth quarter was $148,000 and mortgage rates averaged 6.71 percent. A family earning the median income of $53,914 could afford a home costing $217,300 -- well above the median price, NAR said.

In the third quarter, the median home price was $150,900, the median family income was $53,294 and mortgage rates averaged 7.06 percent.

NAR said the first-time buyer index, which shows the ability of renters to qualify for a mortgage, also rose to 85.2 in the fourth quarter, up from 80.0 in the third quarter. The index has risen from 78.7 in the year-ago quarter.

The latest reading means first-time buyers, who purchase most of the existing homes on the market, had 85.2 percent of the income needed to purchase a typical starter home.

The median price of a starter home fell in the fourth quarter to $125,800 from $128,300 in the prior quarter. The price, however, is up from $118,400 in the fourth quarter of 2000, NAR said.