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Economy in Brief
U.S. Housing Affordability Fell Back in February, but Still in Recent Range
The NAR U.S. Fixed Rate Mortgage Housing Affordability Index decreased 7.6% (-1.4% y/y) in February to 173.1...
European New Car Registrations Remarkably Strong Yet Forgettable
Car registrations are not going to be the only statistic that bears these dual and seemingly dueling characteristics...
U.S. Retail Sales Soar in March
Total retail sales including food service and drinking establishments increased 9.8% (27.7% y/y) during March...
U.S. Industrial Production Rebounded in March
Industrial production rebounded in March, rising 1.4% m/m (+1.0% y/y)...
U.S. Home Builder Index Edges Higher in April
The NAHB-Wells Fargo Composite Housing Market Index rose 1.2% to 83 during April...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller July 10, 2015
The National Association of Realtors Composite Index of Home Affordability declined 3.7% during May to 159.7 (-0.9% y/y), down for the fourth consecutive month. The decline was driven by a 4.7% rise in home prices which have increased 8.6% during the last twelve months. During the last ten years there has been a 69% correlation between the affordability index level and new plus existing single-family home sales.
The rise in home prices offset a dip in mortgage interest rates to 3.9%, the lowest level since June 2013. As a result, principal plus interest payments amounted to $869 per month, up 3.1% y/y. This increase outpaced the 2.1% y/y rise in medium family incomes. Mortgage payments as a percent of income rose to the highest level (15.7%) in nine months.
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.
Recent Developments and the Outlook for the Economy is the title of today's speech by Fed Chair Janet L. Yellen and it can be found here.
Housing Affordability | May | Apr | Mar | May Y/Y | 2014 | 2013 | 2012 |
---|---|---|---|---|---|---|---|
Composite Index | 159.7 | 165.9 | 171.6 | -0.9% | 166.3 | 179.6 | 198.8 |
Median Sales Price (Existing Single Fam. Home) | $230,300 | $220,000 | $212,100 | 8.6% | $207,125 | $195,933 | $175,783 |
Monthly Mortgage Rate | 3.90% | 3.95% | 3.95% | 4.34% | 4.30% | 4.00% | 3.83% |
Principal and Interest Payment | $869 | $835 | $805 | 3.1% | $820 | $750 | $657 |
Median Family Income | 66,608 | $66,483 | $66,311 | 2.1% | $65,321 | $64,030 | $62,531 |
Payment as a Percent of Income | 15.7 | 15.1 | 14.6 | 15.5 | 15.1 | 14.0 | 12.6 |