Housing more affordable

Radio NZ reports:

Houses and rents are more affordable as costs fall and consumers benefit from lower interest rates and higher wages, according to new reports from Massey University.

National home affordability improved 8.7 percent in the three months to June, on top of a 9.3 percent improvement in the first quarter of the year.

Report author, Massey Business School senior lecturer Arshad Javed said a combination of lower borrowing costs and wage growth has helped offset affordability pressures in many regions, even where house prices stayed high.

This is good news. Basically the report looks at three factors – house prices, incomes and mortgage rates.

For the quarter, the national median house price was down 1.2 percent to $763,000, while an average two-year fixed mortgage rate was 37 basis points lower to 5.66 percent, and weekly earnings were 1.65 percent higher.

That is the sweet spot – house prices down, mortgage rates down and earnings up.