Nationally, it requires 21.4 percent of the median income to buy a median-priced home as of September. While this makes affordability historically low, it is actually an improvement from the peak set in July of 21.7 percent. This latest information comes for Black Knight's Mortgage Monitor Report.
"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, executive vice president of data and analytics for Black Knight. "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."
Even with higher home prices, the national payment-to-income ratio remains 2.8 percent below the average in the late 1990s and nearly five percent under the average seen between 2000 and 2003. According to reports, based on home prices, interest rates and income, adjusted home values are 38.4 percent below the 2006 peak.
Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4 percent while 15-year rates are near 3.25 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.