For the second month in a row, homes in the U.S. became more affordable. According to the National Association of Realtor’s Housing Affordability Index, housing affordability improved in August as the average monthly mortgage payment dropped by 1.1. percent.
The recent improvement in affordability comes after a yearlong decline due to limited inventory, bidding wars and skyrocketing home prices. As anticipated, the housing market is beginning a cooling off as demand lessens during the fall months.
Despite the slight improvement in the affordability of homes nationwide, the gains were offset by stagnant wages. The median family income fell by 0.7 percent in August.
Affordability is measured as the income needed so that mortgage payments on a 30-year fixed rate mortgage with a 20 percent down payment would only account for 25 percent of household income.
Today, conforming no-point 30-year fixed mortgage rates are averaging 2.875 percent and 15-year rates are near 2.25 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 (877) 700-0942 and your questions may be featured in an upcoming article.
