Housing affordability strong despite rising prices
Home prices continue to increase, yet affordability actually improved since July, according to the latest Mortgage Monitor report from Black Knight.
As of September, the average homeowner needed 21.4% of their median income to purchase a home. This is actually down from July’s post-recession peak of 21.7% and low by historical standards.
For comparison, an average 24.2% of the median income was required to purchase a home from 1995 to 1999. That increased to 26.2% in the years before the housing boom from 2000 to 2003.
“Rising home prices continue to offset the majority of would-be savings from recent interest rate declines, which has kept home affordability near a post-recession low,” said Ben Graboske, Black Knight executive vice president of data and analytics. “That being said, when viewing the market through a longer-term lens, affordability across most of the country still remains favorable to long-term benchmarks.” Home prices increased 6.24% from last year in August.
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