The average-priced home requires 21.3% of the median household income.

Now could be the best time to buy a home since early 2017 as rates on home loans have eased to help home affordability reach an 18-month high. But while home prices have been accelerating at a slower pace for the past 15 months, that factor appears to be easing, with potentially higher price growth ahead. So, we are potentially at something of a sweet spot with the average-priced home requiring 21.3% of the median household income, down from 23.3% in November 2018, when rates hit a 7-year high. 

Black Knight’s Mortgage Monitor Report shows that the affordability landscape has changed significantly. noted: “Despite the average home price rising by more than $12K since November, today’s lower fixed interest rates have worked out to a $108 lower monthly payment when purchasing the average-priced home with 20% down,” said Black Knight Data & Analytics President Ben Graboske. He also added that the homebuying power of first-time buyers of an average-priced home has been boosted by around 15% due to the lower rates. 

Source: Black Knight