Affordability reached its highest point for many years in August 2019.

A homebuyer with the national median income buying the median priced home is using the lowest share of their income for home loan payments in 20 years. Affordability reached its highest point for many years in August 2019 and continued in September as 30-year rates fell to the mid-3's, meaning that a typical buyer would need to spend 20.7% of their monthly income on principal and interest (P&I) mortgage payments. The payment-to-income ratio is 4.5% below its long-term average (1995-2003) according to the latest Black Knight Mortgage Monitor released today (10/7). 

The $1,122 in monthly P&I required to purchase the average home is down 10% from November – when interest rates peaked near 5% – despite home prices rising more than 4% from that point. “Back in November 2018, we were reporting on home affordability hitting a nine-year low,” said Black Knight Data & Analytics President Ben Graboske. “Interest rates were nearing 5%, pushing the share of national median income required to make the P&I payments on the purchase of the average-priced home to 23.7%. In the time since, rates have tumbled and the affordability outlook has improved significantly.” 

Source: Black Knight