Despite the jump in the latest median single-family home price — $220,600, up from around $160,000 just a few years ago, according to the National Association of REALTORS® — the large pric...e gains are not denting affordability.
Even with home prices climbing, home ownership remains affordable because low mortgage rates have helped to offset the price gains, writes Lawrence Yun, NAR’s chief economist, at NAR’s Economists’ Outlook blog. Also, incomes have risen slightly as the unemployment rate has fallen, which also has helped to improve the affordability picture.
A home buyer buying a median-priced home at the current mortgage rate and having a 20 percent down payment would make a monthly payment of about $867. That is 15.9 percent of monthly gross family income, compared to an average of 21.3 percent over the past 30 years, Yun notes. Source: “Affordability in Monthly Mortgage Payments,” National Association of REALTORS® Economists’ Outlook blog (Oct. 14, 2014
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