A new report finds that moving into a new home is more affordable now than anytime in the last 40 years.
According to a study by Beacon Economics
, homes in August were at their most affordable levels since the data used became available in 1969. The company says that in order to make mortgage payments on an average home, a family would only need to spend 16.9 percent of their income. It's also the 21st consecutive month in which that percentage has fallen below 20 percent.
"Home affordability has reached an historic high," says Beacon Economics founding principal Christopher Thornberg. "Nationwide, prices are down approximately 25 percent from their peak, and mortgage financing rates are at all-time lows."
The study also said that while home prices may fluctuate over the next few months, the company expected the affordability of housing to bring people back into the market, which would reduce inventory, drive up demand and eventually raise prices.
There is certainly a significant amount of housing inventory to absorb. The National Association of Realtors last month said that there was am 11.6-month supply of existing homes on the market - roughly double the 5 to 6 percent seen in a healthy housing market.