Housing affordability jumps for the first time since 2016

June 3, 2019 - 2 min read

Buying a home just got easier

There’s never been a better time to buy a home — at least not in the last three years. According to a new analysis, housing affordability has officially increased for the first time since 2016.

Verify your new rate

Housing affordability is on the rise

According to a new analysis from First American, national housing affordability has finally increased, marking the first time in three years it’s seen a jump.

As Mark Fleming, First American’s chief economist, explains, “What began as a modest shift toward a buyers’ market in six cities last month has expanded into a national shift in affordability.”

The reason behind the increased affordability is three-fold, with slowing home price growth, rising household income and declining mortgage rates all playing a role. Mortgage rates officially dipped below 4 percent last week, according to Freddie Mac, and home price appreciation has been slowing down for a full year. In the meantime, household income grew 3 percent over the year.

Incomes are finally outpacing housing costs in all major cities

Where affordability is up the most

First American’s analysis shows that 15 of the 44 biggest metros have seen “real” home prices decline. These prices factor in local incomes, interest rates and nominal home prices.

The biggest dips in real home prices were seen in San Jose, California (with prices down 7.6 percent); Seattle (-6.4 percent); San Francisco (-4.4 percent); Portland, Oregon (-3.9 percent); and Los Angeles (-3.1 percent).

Where home prices have slowed the most — and one state where prices actually dropped

At the state levels, Wyoming, West Virginia, Louisiana, Alabama and Oklahoma saw the biggest dips.

“Given the trend nationally, it’s no surprise that more markets experienced falling real house prices,” Fleming said. “The clear trend is affordability levels are improving in more parts of the country.”

Get today’s mortgage rates

Are you looking to take advantage of growing housing affordability? Then shop around and see what mortgage rates you qualify for today.

Time to make a move? Let us find the right mortgage for you

Aly J. Yale
Authored By: Aly J. Yale
The Mortgage Reports contributor
Aly J. Yale is a mortgage and real estate writer based in Houston who has contributed to Forbes and worked for organizations such as The Dallas Morning News, PBS, NBC, and Radio Disney.