It was easier to afford a home in August than at any time in the past year, according to the latest monthly affordability index, meaning the typical family had more estimated income to afford a home at the national median price.
The affordability index reached 160.4, meaning the typical family possessed 160.4 percent of the estimated income required to purchase a home.
The median effective rate on loans closed on existing homes came in at 3.66 percent, which is lower than any median rate this year or last, according to the data. The median family income also climbed to $79,218 and the median existing single-family home hit $280,700, down slightly from the previous two months.
The index measures whether or not the typical family – defined as one earning the median family income as reported by the U.S. Census Bureau — could afford a typical home, which is defined as the national median-priced existing single-family home.
A value of 100 means that the typical family has enough income to qualify for a mortgage on a median-priced home, assuming a 20 percent downpayment and that the payment to income ratio cannot exceed 25 percent of the median family income.