Supported by lower interest rates, homes became more affordable to U.S. median-income families in the third quarter, even with house prices inching up constantly in metro areas, a leading industry association said on Thursday.
In the third quarter, 74.1 percent of all new and existing homes sold were affordable to families earning the U.S. median income of $65,000. This was up slightly from 73.8 percent in the previous quarter, said the National Association of Home Builders (NAHB).
Ogden-Clearfield, Utah, was named the most affordable major housing market in the United States in the third quarter, with 93. 2 percent of all homes sold affordable to families earning the area's median household income of $71,500.
The median price of all homes sold in the third quarter was $189,000, rising from $176,000 in the same period of last year. This was also the highest housing price since the final quarter of 2008, according to the association.
David Crowe, chief economist of NAHB, cited record low mortgage rates as the main contributor to the improvement of housing affordability. But he noted that being able to afford a home was not relevant to getting approved for a mortgage in the current marketplace.
U.S. fixed mortgage rates have remained at or near record lows since last fall, a crucial incentive that supports house refinancing and buying. In the week ending Nov. 15, the 30-year fixed-rate mortgage (FRM) and 15-year FRM both hit their new all- time lows of 3.34 percent and 2.65 percent, respectively.
With constant improvement this year, the U.S. housing crash is said to have reached the bottom. However, many economists hold that the market still needs years to recover entirely as the bottom period will be prolonged.
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