First American’s proprietary Real House Price Index (RHPI) looks at July 2016 data and includes analysis from First American Chief Economist Mark Fleming the explains how rising incomes and low interest rates are contributing to increased affordability in most major U.S. markets.

“Rising household incomes and falling mortgage rates are currently boosting consumer house-buying power in many major metropolitan markets, more than offsetting any nominal gains in price levels.”

“Rising household incomes and low mortgage rates continue to foster meaningful growth in consumer house-buying power across of the majority of major metropolitan markets in July, offsetting any nominal gains in price levels,” said Fleming. “Market price levels cannot be considered in isolation. The real price level must consider how income levels and interest rates influence the amount one can borrow.”

The RHPI offers an alternative view of the change over time of house prices at the national, state and metropolitan area level. It measures the price changes of single-family properties throughout the U.S. adjusted for the impact of income and interest rate changes on consumer house-buying power. Because the RHPI adjusts for house-buying power, it is also a measure of housing affordability.

For Mark’s full analysis on affordability, the top five states and markets with the greatest increases and decreases in real house prices, and more, please visit the Real House Price Index.

The RHPI will be updated monthly with new data, so look for the next edition of the RHPI the week of October 24, 2016.