Lower Mortgage Rates Push Housing Affordability to Highest Level in Three Years
With mortgage rates at a three-year low and a healthy job market, housing affordability rose to its highest level in three years in the third quarter of 2019, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI) released today.
In all, 63.6 percent of new and existing homes sold between the beginning of July and end of September were affordable to families earning the U.S. median income of $75,500. This is up from the 60.9 percent of homes sold in the second quarter of 2019 that were affordable to median-income earners and slightly higher than a first quarter 2019 reading of 62.6.
The national median home price remained steady at $280,000 in the third quarter, flat from the previous quarter, but a jump from the first quarter when the median price was $260,000. At the same time, average mortgage rates fell from 4.07 percent in the second quarter to 3.73 percent in the third quarter, reaching a three-year low.