Black Knight Financial’s September Mortgage Monitor shows that nationally it requires 21.4% of median income to purchase the median-priced home.
That compares to the 24.2% required between 1995-1999 and the 26.2% needed from 2000-2003.
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, Executive Vice President – Data & Analytics, 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.”
Graboske acknowledged that conditions are varied across the country but most markets are more affordable than the longer-term benchmarks. Only Hawaii, California, Oregon, and Washington, D.C., have higher payment-to-income ratios today than their longer-term benchmarks.
Black Knight’s data shows that most markets would remain relatively affordable even if prices continue to rise at the 6.2% rate recorded by its price index in August.
There is however potential for affordability to be impacted by a continued rise in interest rates with some states exceeding the longer-term benchmarks by this the fall of 2018.
More market update:
The housing market continues to see increasing prices in many US cities but homes are still relatively affordable.