What Does Affordability Look Like Now?

Affordability is always a top concern for home buyers. That’s no surprise. Buying a home is a major financial transaction and you want to feel comfortable knowing you’re getting a good deal for your money and that you can afford the monthly mortgage payment. That’s why recent spikes in mortgage rates and home prices have potential buyers more hesitant these days. So where does affordability stand right now? Well, according to the most recent release of the Mortgage Bankers Association’s Purchase Applications Payment Index, the national median monthly mortgage payment actually fell recently, dropping from $1,844 in July to $1,839 in August. That continues a three-month trend of improving affordability. But Edward Seiler, MBA’s associate vice president, housing economics, and executive director, Research Institute for Housing America, says the gains likely stopped in September. “Most of the country saw modest improvements in home buyer affordability for the third straight month because of slightly lower mortgage rates amidst steady income gain growth,” Seiler said. “The recent stretch of modest affordability improvement likely hit a speed bump this month, as mortgage rates have jumped …” It’s true. Average mortgage rates have moved higher in recent weeks and have likely pushed mortgage payments higher as well. (source)

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