Housing affordability up for second consecutive month
NAR has released an encouraging index of facts and figures regarding housing affordability. In the August Housing Affordability Index they state that at the national level, housing affordability is up from a year ago for the second consecutive month.
The median sales price for a single family home was $242,200, up approximately 5.3 percent from a year ago. The NAR does qualify that their Housing Affordability Index calculations assumes a 20 percent down payment and a 25 percent qualifying ration (principal and interest payment to income).
Regional performance varied
According to the August Index, despite the month-to-month changes, the most affordable region in which to live remains the Midwest, where the affordability index is 204. All regions improved in August.
The least affordable region, unfortunately, is the West where the index is currently 119.2. Hanging in the middle is the South at 166 and the Northeast at 165.1.
Mortgage applications are up, rates remain down
Nationally, mortgage rates are also down by approximately 41 basis points from one year ago. Mortgage applications are currently up and rates remain historically low according to the NAR, despite income levels rising a modest 2.4. percent.
Additionally, purchase mortgage applications are also up and rates are remaining historically low. The NAR is cautious to state however, that they expect these rates to begin to increase at any time.
To see what housing affordability looks like in your market and learn more about the methodology and assumptions behind the facts and figures, you can view the NAR’s full data release here.