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Should you buy a home today?

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The Housing Affordability Index factors in mortgage rates, housing values, and income data to determine whether a typical American family can afford to purchase a median-priced home.

The higher the index value, the higher the affordability.

A reading of 145 indicates that a family with a median income has 45% more earnings than necessary to afford a median-priced home.

A reading of 80 suggests that a typical family earns 20% less than needed to shoulder the cost of the same dwelling.

Where are we right now?

According to the most recent Realtor.org preliminary reading, the current index value is 159.3.

By this measure, homes are 27% more affordable now than they've been on average over the last 33 years -- the mean since 1981 is 124.8.

Data released Tuesday showed home prices rose in June by the smallest year-over-year amount in 20 months, slowed by modest sales and more properties coming on the market.

Data provider CoreLogic said prices rose 7.5 percent in June compared with 12 months earlier. That's a solid gain but less than the 8.3 percent year-over-year increase in May and a recent year-to-year peak of 11.9 percent in February.

30-year mortgage rates, currently at 4.14 percent, down from 4.53 percent at the start of the year, and increasing home prices will continue to work against housing affordability.

As housing affordability decreases, it may become more challenging for people to realize the American dream of home ownership.

Should you buy a home today? If you're sitting on the fence, now may be a good time.

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