The M Report – Samantha Guzman
The national mortgage payment-to-income ratio sits at 21 percent, according to Black Knight Financial Services’ latest release of its Mortgage Monitor Report that was released today. The report, which is based on data from the end of January 2015, notes despite two years of home price increases at the national level, affordability is better now than it was in the years prior to the housing bubble. This is due primarily to the current low interest rate environment.
The payment-to-income ratio now stands above the 26 percent average seen during the 2000 to 2002 period just prior to drastically increasing home prices. It is up from the 17.6 percent ratio seen in October 2012, but down from the July 2006 high of 34.7 percent. Home prices could rise another 25 percent, or interest rates could jump 2 percent, before the affordability ratio would reach pre-bubble levels.
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