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by Tom Moeller May 10, 2019
The National Association of Realtors reported that its Composite Index of Home Affordability declined 2.5% during March (+0.1% y/y). Affordability stood 29.0% below the peak level during January 2013.
Together, principal & interest payments of $1,060 rose m/m to 16.4% of median income, but the percentage was the same as it was twelve months earlier. This percentage compares to a high of 18.2% last June, but was above the low of 11.6% early in 2013. The median sales price of an existing home rose 3.8% y/y to $261,100. The average mortgage rate slipped to 4.51% in March, but remained up from a 3.43% low in December 2012. Higher prices held back the affordability increase during the past year. Growth in median family income slowed to 2.6% y/y in March from 3.4% during all of last year and roughly 4.0% in the prior two years.
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 | Mar | Feb | Jan | Mar Y/Y | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| Composite Index | 152.7 | 156.6 | 154.6 | 0.1% | 147.9 | 159.3 | 168.5 |
| Payment as a Percent of Income | 16.4 | 16.0 | 16.2 | 16.4 | 17.0 | 15.7 | 14.9 |
| Principal and Interest Payment | $1,060 | $1,033 | $1,050 | 2.4% | $1,079 | $967 | $880 |
| Median Sales Price (Existing Single Family Home) | $261,100 | $252,000 | $251,200 | 3.8% | $259,458 | $247,508 | $233,642 |
| Monthly Mortgage Rate | 4.51% | 4.60% | 4.76% | 4.63% | 4.72% | 4.20% | 3.88% |
| Median Family Income | $77,711 | $77,644 | $77,902 | 2.6% | $76,396 | $73,891 | $71,062 |
