In Black Knight’s number crunching, the current national level needed to purchase a median-priced home is 21.4 percent of the median income, which is lower than the 24.2 percent level from 1995-1999 and the 26.2 percent level from 2000-2003. On a year-over-year measurement, the monthly payment needed to purchase the median-priced home is only higher by $100.
Furthermore, Black Knight determined that the payment-to-income ratios in 47 of 50 states were below their 1995-2003 averages, with only California, Hawaii and Oregon plus the District of Columbia recording higher payment-to-income ratios today than their longer-term benchmarks.
“Rising home prices continue to offset the majority of would-be savings from recent interest rate declines, which has kept home affordability near a post-recession low,” said Ben Graboske, Executive Vice President of Data and Analytics at Black Knight. “That being said, when viewing the market through a longer-term lens, affordability across most of the country still remains favorable to long-term benchmarks.”