The Housing Affordability Index from the National Association of Realtors increased to 151.9 in June from 137.7 a year earlier in June. That’s a jump of 10 percent. A higher reading means homes are getting more affordable, per NAR’s magic sauce that measures prices, incomes and financing costs.
Americans trying to buy homes have been challenged with a shortage of available properties and prices that have increased at a faster pace than incomes.
The U.S. median price of an existing single-family home was $288,900 in June, up 4.5% from $276,500, according to the data behind NAR’s affordability index. The median family income was $78,916, up 3.5% from $76,217 a year ago.
The big difference between this June and a year earlier was mortgage rates. The average 30-year fixed rate was 3.84%, NAR said, compared to 4.74% last year. That meant the average monthly mortgage payment, measuring principal and interest, was $1,082 in June, compared with $1,153 a year ago. The payment as a percentage of income was 16% in June, down from 18% a year earlier.
Rates have dropped since June. The average U.S. rate for a 30-year fixed mortgage is 3.6% this week, matching last week, according to Freddie Mac. That’s the lowest rate since November 2016. A year ago, the rate was 4.53%, Freddie Mac said.