The National Association of Realtors reported that its Composite Index of Home Affordability declined 8.3% y/y during August to 141.2. The index was 34.4% below its peak in January 2013. Month-to-month, home affordability rose slightly.

Together, principal & interest payments of $1,119 eased m/m to 17.7% of median income. That percentage compared to a low of 11.6% early in 2013. Higher prices helped reduced affordability during the last year. The median sales price of an existing home strengthened 4.9% y/y to $267,300. This price was lower than during the prior two months as prices typically weaken during the summer. The price decline was accompanied by a higher average mortgage rate of 4.78%, up from a 3.43% low in December 2012. Growth in median family income slowed to 3.0% y/y in August 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.