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The Week Ahead: Affordability Measured

Black Knight's latest Mortgage Monitor report is set to release on Monday. In the previous report, Black Knight revealed that affordability was up, it now requires 20.7% of the national median income to make monthly principal and interest payment on an average-priced home—the second lowest payment-to-income ratio in 20 months.

Affordability was at a nine-year low earlier this year when the payment-to-income ratio increased to 23.7%, causing an extended slowdown in home price growth. Falling rates over the past few months have boosted buying power by 16% ($46,000), while not impacting the P&I payments.

Black Knight found that annual home price growth was flat in August—coming in at 3.8%—after rising for the first time in 17 months in July. June’s annual home price growth rate of 3.7% was the smallest in almost seven years before trending upward.

“It remains to be seen if this is merely a lull in what could be a reheating housing market, or a sign that low interest rates and stronger affordability may not be enough to muster another meaningful rise in home price growth across the U.S,” said Black Knight Data & Analytics President Ben Graboske. “That the strongest gains in—and strongest levels of—affordability were in August and early September could bode well for September/October housing numbers. As such, we’ll be keeping a close eye on the numbers coming out of the Black Knight Home Price Index over the coming months.”

Here's what else is happening in The Week Ahead.

CFPB Symposium (November 6)
Banking, Housing, and Urban Affairs Hearing (November 7)
Consumer sentiment index (November 8)

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
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