In the wake of the housing recession, the sharp decline in median home prices and record low mortgage rates combined to boost affordability to record levels in nearly all markets.
Affordability varies greatly across markets, though, even when compared to local median household income.
Markets in the West, particularly California, require the highest share of income to be devoted to the monthly principle and income payment, while markets in the Midwest and Upstate New York are among the most affordable.
The recent increases in home prices will erode some of the gains, but record low mortgage rates will help to ameliorate this impact, while prices and rates are likely to remain below levels seen during the peak of the housing market for several quarters.
Ken Fears is the Manager of Regional Economics and Housing Finance Policy. He focuses on regional and local market trends found in the Local Market Reports and the Market Watch Reports . He also writes on developments in the mortgage industry and foreclosures.