Houses Least Affordable They Have Been

 

Rising mortgage rates, bigger jumps in home prices and still-moderate income growth are adding up to a triple threat for the housing market this spring.

Home affordability fell to the lowest level in seven years at the end of 2016, and the ingredients for a reversal are not there anytime soon.

It now takes 22.2 percent of median income to make the monthly principal and interest payment on the median priced home, according to a new report from Black Knight Financial Services, which based the measure on borrowers using a 30-year fixed mortgage. That monthly payment on the median-priced home increased 10 percent in the fourth quarter alone, thanks to a sharp jump in mortgage rates following the presidential election.

 

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