Compared to one year ago, affordability declined in August as the median family income rose by 3.9% while the monthly mortgage payment increased 13.9%. The effective 30-year fixed mortgage rate was 2.89% this August compared to 3.00% one year ago, and the median existing-home sales price rose 15.6% from one year ago.

As of August 2021, the national and regional indices were all above 100, meaning that a family with the median income had more than the income required to afford a median-priced home. The income required to afford a mortgage, or the qualifying income, is the income needed so that mortgage payments on a 30-year fixed mortgage loan with 20% down payment account for 25% of family income. The most affordable region was the Midwest, with an index value of 196.8 (median family income of $86,614 with the qualifying income of $44,016). The least affordable region remained the West, where the index was 114.9 (median family income of $94,372 and the qualifying income of $82,128). The South was the second most affordable region with an index of 160.6 (median family income of $80,180 and the qualifying income of $49,920) The Northeast was the second most unaffordable region with an index of 149.1 (median family income of $99,286 with a qualifying income of $66,576).

Housing affordability declined from a year ago in all the four regions. The Northeast had the biggest decline of 10.7%. The South region experienced a weakening in price growth compared to a year ago of 7.1% followed by the West with a dip of 4.9%. The Midwest had the smallest decrease of 4.8%.

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