“Affordability isn’t just a result of house prices. It’s also income, inflation, and interest rates also play a role. If rates are particularly low or incomes are increasing, homebuyers might actually be able to afford more house than they could have previously.” Mortgage rates play a big role into the housing market, impacting demand, home prices, and affordability. They also fluctuate daily based on inflation, federal reserve and even mortgage backed securities. Sometimes housing affordability is evaluated by comparing housing prices.
A housing market is defined by the ability of residents to reach employment by daily commutes. Generally, this can be defined as a maximum 60-minute one-way commute time, while average work trip times tend to be about 30 minutes in most areas. Middle- income households should be able to afford medium priced homes. “Affordability is measured at the housing market level is different than housing affordability in a neighborhood or part of the housing market.” Even if housing is unaffordable in part of the housing market, there should still be enough housing stock affordable enough to meet the demands of middle-income households.