A report has found that the average first-time house buyer couple is paying 12.6% of their joint income in mortgage repayments, compared with 26% three years ago.

The EBS/DKM affordability index says the average first-time buyer couple was paying €644 a month in April.

The index measures the proportion of after tax income required to meet first year mortgage repayments for an 'average' working couple, each on average earnings with a 90% mortgage. It takes into account mortgage rates, changes in the level of mortgage interest relief, and is based on average earnings and average first-time buyer new house prices nationally and in Dublin.

Referring to mortgage figures from the Irish Banking Federation last week, EBS's Dara Deering said the improvement in affordability levels seemed to be encouraging activity in this area.

DKM's Annette Hughes said recent signs that the economy is stabilising were unlikely to result in house prices reaching the bottom yet. She added that there was a risk of further rises in mortgage rates, which could delay a return to stable house prices.