The National Association of Realtors affordability index dipped for the third straight month in May, meaning the typical family had less estimated income to afford a home at the national median price, according to data released Friday.
The affordability index reached 150.4, meaning the typical family possessed 150.4 percent of the estimated income required to purchase a home.
The median effective rate on loans closed on existing homes came in at 4.11 percent, which is lower than any median rate this year or last, according to the data. The median family income also climbed to $78,238, but the median existing single-family home hit $280,200, putting the further crunch on affordability.
The index measures whether or not the typical family – defined as one earning the median family income as reported by the U.S. Bureau of the Census — could afford a typical home, which is defined as the national median-priced existing single-family home.
A value of 100 means that the typical family has enough income to qualify for a mortgage on a median-priced home, assuming a 20 percent downpayment and that the payment to income ratio cannot exceed 25 percent of the median family income.
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