For those who are considering selling their current home, to either move up to a larger home or into a home in an area that better suits their family needs, or those who are considering buying their first home, now may be the most affordable time to do so.

Affordability housing programs in the United States have long measured house affordability in terms of percentage of income. In the 1940s, the maximum affordable rent for federally subsidized housing was set at 20 percent of income.

This number rose to 25 percent of income in 1969 and rose again to 30 percent in 1981. Over time, the 30 percent threshold became the standard for owner-occupied housing, and it remains the indicator of affordability for housing in the United States.

Keeping housing costs below 30 percent of income is intended to ensure that households have enough money to pay for other non-discretionary costs such as groceries, utilities and taxes. Therefore, policymakers consider households who spend more than 30 percent of income on housing costs to be housing cost burdened.

According to the U.S. Department of Housing and Urban Development these individuals “may have difficulty affording necessities such as food, clothing, transportation, and medical care.”

While it’s no surprise to hear that home prices are rising, according to a recent study, homes are the most affordable they’ve been in over 40 years.

The latest Home Price Index report from CoreLogic shows home prices increased 7 percent year-over-year and 1.4 percent monthly in March. However, a recent study shows that while home prices have been increasing, so have incomes. While most states have once again reached their peak 2007 level home prices, incomes have far surpassed those of last decade.

According to the Census Bureau, the median U.S. household income climbed 3.2 percent to $59,039 in 2016. That followed growth of 5.2 percent in 2015, the largest on records dating to 1968. The combined increase over the past two years is the biggest such rise since the 1960s.

Affordability has also grown due to the sharp drop in mortgage rates over the last 30 years – from a high of over 16 percent in the 1980s to under 4 percent by 2016. In 2018, the median household could afford a home 1.5 times more expensive than the median home price. In 1980, the median household could only afford about .75 of the median home price.

The only period more affordable in the last 40 years was during the housing market crash last decade during which time individuals could purchase distressed properties – foreclosures and short sales – at 20 to 50 percent discounts.

There is no doubt that with home prices and mortgage rates on the rise, the affordability index will continue to fall. If you, or someone you know, is looking to make a change don’t wait. Be sure to contact your local lender and trusted Realtor – they are the experts and they will be able to advise you on the best course of action based on your individual circumstances.

This column is produced by Rick Bisson and his family, who own Bisson Real Estate with Keller Williams Realty of Midcoast and Sugarloaf.