Recent Updates
- US: NAHB/Wells Fargo Housing Market Index (Jan)
- Canada: Consumer Price Index (Dec)
- Bosnia: Wages & Employment (Nov), PPI (Dec)
- UK Regional: Land Registry HPI (Nov), Index of Housing Rental Prices (Dec)
- Ukraine: Population & Migration (Nov)
- more updates...
Economy in Brief
Decline in Refinancing Drag Down U.S. Mortgage Applications
The MBA Mortgage Loan Applications Index fell 1.9% w/w (+56.2% y/y) in the weekend January 15...
U.S. Energy Prices Continue to Rise
The price of regular gasoline rose to $2.38 per gallon (-6.2% y/y)...
Macro Expectations Hold to the High Ground
In January, the ZEW index paints a mixed and somewhat uneven view of its survey universe...
U.S. Housing Affordability Improves During November
The NAR reported that its Fixed Rate Mortgage Housing Affordability Index rose 0.7% (-0.7% y/y)...
U.S. Retail Sales Continue to Fall During December as COVID-19 Cases Increase
Total retail sales declined 0.7% (+2.9% y/y) during December...
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 |