A three-year low in mortgage rates is making it easier for Americans to afford homes even as property prices increase, according to a report Wednesday from the National Association of Realtors.

An index measuring home affordability for first-time buyers rose to 107.3 from 96.3 a year earlier. A reading of 100 means the household median income is exactly enough to buy the median-price starter home. A broader index that measures the overall market, not just entry-level buyers, rose to 162.9 from 145.7 a year earlier.

Americans trying to buy homes have been challenged with a shortage of available properties and prices that have increased at a faster pace than incomes. Cheaper financing lowers their monthly payments, making it easier to purchase properties.

The median price of a starter home was $233,800 in the fourth quarter, up 6.6% from a year earlier, according to the NAR data that went into the index calculations. The median household income for families buying their first homes gained 3.4% in the same period.

The average rate for a 30-year fixed mortgage was 3.76% in the fourth quarter, according to NAR. That compares with 4.95% in the year-earlier period.

The rate probably will average 3.7% in the current quarter, and stay at that level until the third quarter when it likely will bump up to 3.8%, NAR said in a forecast last month. That will boost home sales to 5.52 million in 2020, a gain of 3.4% from 2019, NAR Chief Economist Lawrence Yun said in an interview.

“The low mortgage rates are clearly helping the market conditions,” Yun said. “Home prices consistently rising at a faster pace than people’s income growth has hurt, but because of the historically low rates, it’s providing marginal opportunities for first-time buyers.”

The average U.S. rate for a 30-year fixed mortgage last week fell to a three-year low of 3.45%, according to Freddie Mac. That was the lowest since 3.42% in the first week of October 2016 and almost a full percentage point below the 4.41% recorded a year earlier.