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by Tom Moeller August 8, 2018
The National Association of Realtors reported that the Composite Index of Home Affordability declined 8.8% y/y during June to 134.8, the lowest level since August 2008. The index was 37.3% below its peak in January 2013.
Together, principal & interest payments rose to $1,164 or 18.5% of median income, the highest percentage since August 2008. That percentage compared to a low of 11.6% early in 2013. Higher prices helped reduced affordability. The median sales price of an existing home strengthened 5.2% y/y to $279,300. The price rise was accompanied by a higher average mortgage rate of 4.74%, up from a 3.43% low in December 2012. Growth in median family income slowed to 2.9% y/y in June from 3.3% last year and 4.1% 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 | Jun | May | Apr | Jun Y/Y | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| Composite Index | 134.8 | 140.7 | 145.4 | -8.8% | 158.2 | 168.5 | 168.0 |
| Payment as a Percent of Income | 18.5 | 17.8 | 17.2 | 16.9 | 15.8 | 14.9 | 14.9 |
| Principal and Interest Payment | $1,164 | $1,112 | $1,073 | 12.9% | $967 | $880 | $849 |
| Median Sales Price (Existing Single Family Home) | $279,300 | $267,800 | $259,900 | 5.2% | $247,508 | $233,642s | $221,350 |
| Monthly Mortgage Rate | 4.74% | 4.71% | 4.66% | 4.14% | 4.20% | 3.88% | 4.03% |
| Median Family Income | $75,312 | $75,101 | $74,906 | 2.9% | $73,409 | $71,062 | $68,260 |
