A combination of low mortgage rates and rising incomes have pushed housing affordability to its highest level in 18 months, according to Forbes.
According to new data, housing affordability is actually at its highest point in 18 months—despite a steady uptick in home prices. In fact, the average home price has jumped $12,000 since last November.
Still, low mortgage rates are muting the impact. Data from property data firm Black Knight shows that declining rates have increased Americans’ homebuying power by 15% since last fall, allowing them to purchase a home $45,000 more expensive for the exact same mortgage payment.
Nationally, it takes just over 21% of a homeowner’s monthly income to cover the median mortgage payment. That’s down two percentage points since last fall and 13 points since the pre-crisis peak. Income-to-payment ratios are lowest in Ohio (12%), Indiana (13%) and Iowa (13%).
