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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 June 08, 2018
The National Association of Realtors reported that the Composite Index of Home Affordability declined 8.8% y/y during April to 145.8, the lowest level since October 2008. The index was 32.0% below its peak in January 2013. During the last ten years, there has been a 60% correlation between the affordability index level and the y/y change in existing single-family home sales.
Higher prices have reduced affordability. The median sales price of an existing home strengthened 5.5% y/y to $259,900. The price rise was accompanied by a higher average mortgage rate of 4.66%, up from a 3.43% in December 2012. Together, principal & interest payments rose to $1,073 or 17.1% of median income, the highest percentage since August 2007. That percentage compared to a low of 11.7% early in 2013. Growth in median family income slowed to 2.8% y/y from 3.9% during all of 2016.
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.
Housing Affordability | Apr | Mar | Feb | Apr Y/Y | 2017 | 2016 | 2015 |
---|---|---|---|---|---|---|---|
Composite Index | 145.8 | 150.0 | 160.1 | -8.8% | 158.5 | 168.2 | 168.0 |
Median Sales Price (Existing Single Family Home) | $259,900 | $251,500 | $242,600 | 5.5% | $247,508 | $233,642 | $221,350 |
Monthly Mortgage Rate | 4.66% | 4.63% | 4.42% | 4.11% | 4.20% | 3.88% | 4.03% |
Principal and Interest Payment | $1,073 | $1,035 | $974 | 12.6% | $967 | $880 | $849 |
Median Family Income | $75,093 | $74,944 | $74,828 | 2.8% | $73,545 | $70,941 | $68,267 |
Payment as a Percent of Income | 17.1 | 16.6 | 15.6 | 15.6 | 15.8 | 14.9 | 14.9 |