Housing affordability improves in August for the second consecutive month.
National Housing Affordability Improved in August
According to the National Association of REALTORS® (NAR) housing affordability index report, national housing affordability improved in August for the second straight month.
This break towards affordability in August came as monthly mortgage payments dropped by -1.1%. The 30-year fixed mortgage rate came in at 2.89%, lower than the rate of 3.0% in August 2020.
NAR attributed the improvement in affordability to already low mortgage rates that have dropped in both July and August plus a seasonal slowing in national home price growth at +15.6% y/y.
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NAR’s Affordability Index Comparatively Better in August
According to NAR’s housing affordability index, housing affordability in August rose to 151.3 from a low of 146.5 in June 2021. The housing affordability level in August 2020 was 165.8. (The higher the affordability index level, the more affordable.)
Midwest Most Affordable Region in Country in August 2021.
Take a look at housing affordability levels by regions:
- Midwest – 196.8
- South 160.6
- Northeast – 149.1
- West – 114.9
All of these index values remain below (less affordable) where they were one year ago. Despite that, affordability improved in all regions of the country expect the West in August 2021.
Likewise, the West had the highest mortgage payment to income share at 21.8% and the Midwest had the lowest at 12.7% of income.
Thanks to the National Association of REALTORS® and HousingWire.
