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Housing Affordability Drops to 2010 Levels

February 8, 2017

Two new reports about the U.S. housing market show that higher mortgage rates, increasing home prices and tepid wage growth are all conspiring to keep home ownership out of reach for many middle-income Americans. The December 2016 Mortgage Monitor report from Black Knight Financial Services shows that housing affordability is currently at the lowest levels since 2010—a median wage earner would have to devote 22.2% of their income to make payments on a median priced home. With data from CoreLogic indicating that housing prices will continue higher, the trend seems likely to continue. As the firm’s chief economist told CNBC, “We expect our national index to rise 4.7 percent during 2017, which would put homes prices at a new nominal peak before the end of this year.”

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