Surprisingly affordable housing
Though home prices may be up nominally, affordable housing is plentiful – especially by historical standards. According to new data from Black Knight Financial Services, the percentage of income required to buy today’s median-priced home is actually down significantly from decades prior.Verify your new rate (May 26th, 2020)
Recent data from Black Knight shows today’s median-priced home costs its buyers about 21.4 percent of their income. According to Ben Graboske, Black Knight’s EVP of Data and Analytics, that makes housing pretty affordable, historically.
“When viewing the market through a longer-term lens, affordability across most of the country still remains favorable to long-term benchmarks,” Graboske said.
From 1995 to 1999, buyers had to spend 24.2 percent, and from 2000 to 2000, it was 26.2 percent.
At the state level, affordability is strong across the board. In 47 states, the monthly payment-to-income ratios are below that of their 1995-to-2003 era averages. Hawaii, California and Oregon are the only outliers.
“In looking at the affordability landscape across the country, we certainly see varying levels of affordability in each market compared to their own long-term benchmarks,” Graboske said. “But, by and large, the overall theme is that affordability in most areas, while tightening, remains favorable to long-term norms.”
Even more proof
Black Knight’s isn’t the only data that shows affordability is strong in today’s market.
According to First American, the “real” price of housing has dropped nearly 40 percent since its pre-recession peak and 17 percent since January 2000. First Am’s Real House Price Index measures “consumer house buying power,” taking into account home prices, current incomes and interest rates.
Get today’s mortgage rates
There’s no telling what tomorrow’s market might bring, so get in on today’s affordable market now. Shop around and lock in your low rates today.Verify your new rate (May 26th, 2020)