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The monthly payment on a median-priced home purchased with a 20 percent downpayment increased by $150 per month, according to new data from Black Knight Inc.
Among the markets with the highest averages of median income needed to purchase a median-priced home are the District of Columbia (40 percent), California (38 percent), Hawaii (35 percent) and Maine (33 percent). In total, 14 states have payment-to-income ratios above the national average of 23 percent.
“While the pace of annual home price growth slowed a bit in March, home price appreciation (HPA) is still around 6.5 percent,” said Ben Graboske, Executive Vice President of Black Knight’s Data & Analytics Division. “We’ve also seen interest rates climb by nearly three-quarters of a percent so far this year. Together, those two factors have resulted in a $150 increase in the monthly payment on a 30-year mortgage used to purchase the median-priced U.S. home, about a 14 percent rise since the start of 2018. Stronger-than-average income growth in recent years still hasn’t been enough to keep up with rising HPA and interest rates.”
Graboske added that “seven states are now less affordable than their long-term norms and another 12 are close to hitting that point. Though much of the country remains more affordable than long-term norms, the current trajectory would change that sooner rather than later.”
