Higher home prices are having a significant impact on housing affordability, regardless of historically low mortgage rates. Housing affordability has declined compared to a year ago in all four major regions of the U.S., according to the National Association of REALTORS®’ Housing Affordability Index.
“Incomes are coming down from recent highs, and declining incomes with higher home prices is not a good combination for a potential home buyer,” Michael Hyman, a research data specialist for NAR, writes for the association’s Economists’ Outlook blog.
The monthly mortgage payment has jumped to $1,184. A year ago, it averaged $1,020, marking a 16% increase year over year, NAR notes. Also, the annual mortgage payment as a percentage of income rose to 16% this April from 13.7% a year ago due to higher home prices and a decline in median family incomes.
The West has the highest mortgage payments to income, according to NAR’s data. Home prices in the West recently climbed to a record high of $509,400.