The upward race of housing prices and mortgage rates has continued to push down affordability, according to First American Financial Corporation. That has resulted in a jump in the number of markets where houses are overvalued and, as long CRE history would suggest, potentially up for a price fall.
In its Real House Price Index, or RHPI, First American measured single-family house price changes across the country, "adjusted for the impact of income and interest rate changes on consumer house-buying power over time at national, state and metropolitan area levels."
According to the company, as nominal house prices were up 16.7% year over year and 30-year fixed mortgage rates another 2.5 percentage points higher, housing affordability continued an ongoing swift decline.
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