The decline in mortgage rates in November helped financially strained homebuyers, according to ICE Mortgage Technology‘s latest Home Price Index data.
It took $279 less per month to purchase the median-priced home in November compared to October, according to ICE Vice President of Enterprise Research Andy Walden. As a result, mortgage demand ticked up as well last month.
“Rate relief has also nudged both home affordability and purchase demand in the right direction after hitting pandemic-era lows in recent months, with the prospect of further improvement in both as we make our way into the new year,” Walden said.
According to ICE’s report, it took 35.9% of the median household income to cover the principal and interest payment on a median-priced home, down from 40.3% less than two months ago. The last time homebuying was this affordable was in May 2023.
However, affordability hurdles persisted in November
Home prices rose at a pace of 5.1% on a year-over-year basis, straining buyers’ purchase power. It was up from a revised of 4.5% in October. Regionally, prices rose the most in the Northeast, led by Hartford, Connecticut (+0.85%), and Providence, Rhode Island (+0.50%). Meanwhile, Portland, Oregon (-0.38%), Minneapolis (-0.35%), Austin (-0.35%), San Antonio (-0.27%), and New Orleans (-0.24%) posted the largest rate decreases in the country.
“Price growth has been much more modest in recent months, which should help to moderate that annual growth rate as we make our way through early 2024,” Walden said in a statement.
