ATLANTA–Home affordability has reached its best level in 2½ years, driven by easing mortgage rates, according to a new analysis released by Intercontinental Exchange (ICE) as part of its Mortgage Monitor Report.
According to its findings:
Affordability at Best Level Since Early 2023
“With 30-year mortgage rates averaging 6.26% in mid-September, the monthly principal and interest (P&I) payment on an average-priced home has fallen to $2,148, or 30% of the median U.S. household income,” the company said. “Though still more than five percentage points above its long-run average, P&I costs have declined from 32% earlier this summer and significantly improved from their 35% peak in late 2023.”
Home Prices Firm as Affordability Improves and Inventory Tightens
“Annual home price growth rose to +1.2% in September after eight months of slowing, driven by falling inventory and improved affordability. Nationally, listings remain 17%–19% below 2017–2019 norms, as sellers in previously oversupplied markets delay sales to avoid price cuts,” ICE stated.
Borrower Profiles Reflect Improved Financial Stability
“The average credit score for purchase locks has climbed above 736, the highest recorded in the six-year history of ICE’s origination dataset, indicating a shift toward a more credit-qualified borrower mix,” the analysis found.
A Look at Home Prices
The ICE Home Price Index (HPI), a repeat-sales index, reports the median price change of repeat transactions. The index was up 1.2% year over year in September, up from 1.0% in August, the company said.
Among the findings in its analysis:
• Annual home price growth reaccelerated in early September following eight consecutive months of slowing—rising to +1.2% from a revised +1.0% in August—as falling inventory met improved affordability from easing mortgage rates.
• On a seasonally adjusted basis, prices rose by +0.17% in the month, equivalent to a seasonally adjusted annualized rate (SAAR) of +2.1%, “suggesting the annual home price growth rate may tick modestly higher in coming months,” the company said.
• The bulk of the firming occurred among single-family residences, which are up +1.5% from the same time last year, an increase from +1.3% in August.
• The condo market remains soft, with prices down -1.8% from the same time last year, a modest improvement from -1.9% in August.
• Only 20% of markets saw prices fall on a seasonally adjusted basis in September, the fewest in nine months and down from 55% just two months prior.
