Housing affordability experienced improvement nationwide after months of struggling, according to the National Association of Realtors’ Housing Affordability Index released Thursday.

In the third quarter, the median price of a single-family home in the United States rose to $280,200 from $279,500. Nonetheless, mortgage rates fell from 4.08 percent to 3.71 percent while the percentage of a household income required for a mortgage fell from 16.5 percent to 15.6 percent. Median family income rose from $78,572 to $79,215.

The index, which first launched in 1970, utilizes a combination of median home prices, median family incomes and average mortgage interest rates to determine housing affordability. Based on NAR’s calculations, the affordability index clocked in at 159.8 points — 8 points higher than the previous quarter but lower than 167.1 points in 2016.

As a result, homebuyers can earn slightly less while still being able to afford a median-priced home. In the previous quarter, homebuyers needed to make at least $51,744 to afford a down payment and mortgage payments. In the third quarter, that number decreased to $49,584.

According to the NAR analysis, it remains unclear if the affordability uptick will last. While low mortgage rates and a strong economy are helping more people make the leap to homeownership, increased competition and limited inventory are also driving prices up.

Email Veronika Bondarenko

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Inman Connect Las Vegas is back and there are only a few presale tickets left! Register today before they're gone.REGISTER×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription