Due in large part to the persistent decline in mortgage rates throughout 2019, housing is now more affordable than it has been at any point in the last three years.
That’s according to a new analysis of the nation’s housing market from the National Association of Home Builders and Wells Fargo.
As the latest data from Freddie Mac shows, mortgage rates now sit at 3.69%, more than a full percentage point below where they were at this time last year, when the market rate was near 5% (4.94%, to be exact).
Rates stayed at the same level through the second week of November 2018, but that was as high as they climbed, as rates then began dropping and continued dropping throughout much of this year.
And that full-percentage-point-drop has been very good for homebuyers, as the National Association of Home Builders/Wells Fargo Housing Opportunity Index shows that housing affordability climbed in the third quarter to the highest level since 2016.
According to the report, 63.6% of new and existing homes sold between the beginning of July and end of September were affordable to families earning the U.S. median income of $75,500.
That’s up from the 60.9% of homes sold in the second quarter of 2019 that were affordable to median-income earners and up from the first quarter 2019 total of 62.6%.
As the report notes, much of the increase in affordability was driven by the decline in mortgage rates.