As interest rates hover around record low levels and home prices bounce along the bottom, incomes are also cooperating to make housing more affordable than ever.

Of course, all those favorable affordability conditions don't amount to a hill of beans if lenders remain tight fisted with mortgage money.

However, in its first quarter 2012 report on metropolitan area home prices, the National Association of Realtors took a look at incomes and home prices, and found that qualifying incomes are well below median incomes in most of the nation, allowing many buyers, who can pass muster at the mortgage counter, to buy a home and stay well within their means.

"Historically favorable housing affordability conditions are making it easier for buyers to enter the market, despite the unnecessarily tight credit conditions," said NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, FL.

To measure affordability, NAR examined incomes necessary to purchase a median-priced ($158,100), existing, single-family home, assuming down payments of 5 percent, 10 percent or 20 percent, and an interest rate of 4 percent, with 25 percent of gross income devoted to mortgage principal and interest.

The national median family income came in at $61,000 in the first quarter, but to purchase a home at the national median price, a buyer with 5 percent down only needed a $34,700 income. With a 10 percent down the buyer would need a $32,900 income and with 20 percent down, the income drops further, to $29,300.

In an example, NAR cited a buyer in Indianapolis, IN making a 10 percent down payment who would need an annual income of $24,000 to purchase a median-priced home. In Seattle it would be $55,300.

Keep in mind, while the average mortgage interest rate is hovering just below 4 percent some rates are lower still. Erate.com, which tracks a range of interest rates, reported rates on 30-year fixed-rate mortgages hovering around 3.6 percent for weeks.

Of course, such a rate is for prime borrowers with pristine credit and sky-high credit scores, but those borrowers can really cash in on affordability.

"For now, buyers are facing an extraordinarily advantageous situation if they can obtain a mortgage," said Lawrence Yun, NAR chief economist.

And there's the rub. It is a big "if."

First-time buyers, who can qualify for a mortgage, are taking affordability to the bank.

They accounted for 33 percent of homes purchased in the first quarter, up from 32 percent a year ago.

Investors also know an affordable deal when they see one.

NAR reported investors, drawn by bargain-basement prices, make up the bulk of cash purchasers, and accounted for 22 percent of all transactions in the first quarter, up from 19 percent in the fourth quarter and up from 21 percent a year ago.

The share of all-cash home purchases in the first quarter was 32 percent, up from 29 percent in the fourth quarter. All-cash deals accounted for 33 percent in the first quarter of 2011.