In spite of rising home prices in many markets, homes remain affordable. A report from the Urban Institute highlighted its housing affordability index, which measures median household income against a standard mortgage for a median-priced home. It found that the median household today can afford a house that’s $70,000 above the median price. The First American Real House Price Index, which factors home prices, interest rates and income, found real home prices are 38.4% below the 2006 peak. Their chief economist confirmed, “affordability…remains high by historic standards.”
More folks are indeed finding homes affordable. The Census Bureau reports the homeownership rate rose in Q3 to its highest level since 2014. It’s now risen for several quarters, so it looks like growth is back. What’s definitely back is the American Dream. Now 82% of Americans “say they have achieved the American Dream or are on their way to achieving it,” according to the Pew Research Center, a nonpartisan fact tank subsidiary of The Pew Charitable Trusts. Three years ago, CNN’s American Dream project reported 60% of the country believed the American Dream was unattainable.