The National Association of Realtors reported that during all of last year its Housing Affordability Composite Index declined to 178.6, the lowest level since 2010. For December, the index slipped further to 168.1 from 170.90 during November. The Affordability Index reached a peak of 213.6 in January when average mortgage interest rates were at their low of 3.4%.

The decline in affordability last year reflected a rise in the average mortgage rate to 4.00%, then a further increase by December to 4.41%. Also, the median sales price increased 11.5% for the full year to $195,950. The latest price of $197,900 was, however, down from the June peak of $214,600. Median family income rose during December to $64,081, up 1.7% y/y. For the full year income rose 2.5% to $63,623. Higher rates combined with improved home prices to raise the monthly mortgage payment to 14.1% of income for all of last year and to 14.9% by yearend.

The Housing Affordability Index equals 100 when median family income qualifies for an 80% mortgage on a median priced existing single-family home. A rising index indicates more buyers can afford to enter the home-buying market. Data on Home Affordability can be found in Haver's REALTOR database. Interest rate data can be found in the WEEKLY and DAILY databases.