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Black Knight: Housing is More Affordable Despite Rising Prices
While home prices continue to rise to new peaks, housing affordability is becoming easier to achieve, according to new data from Black Knight Inc.
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.”
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