The National Association of Realtors’ housing affordability index continued to climb in the first quarter of 2020, showing that it was easier to afford a home in the first quarter than any time in the past four years. Affordability increased as a result of both declining home prices and mortgage rates, month-over-month.
Released Tuesday, the affordability index reached 166.8, meaning the typical family possessed 166.8 percent of the estimated income required to purchase a home. The median existing single-family home was $274,600 and the average 30-year fixed-rate mortgage was 3.57 percent.
In the first quarter of 2019, the median existing single-family home was $254,900 but the average 30-year fixed-rate mortgage was 4.62 percent.
The index measures whether the typical family – defined as one earning the median family income as reported by the U.S. Census Bureau — could afford a 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.