The National Association of Realtors reported that its Mortgage Fixed Rate Index of Home Affordability declined 1.4% during May (+5.6% y/y). Affordability stood 29.5% below the peak level during January 2013. The fixed rate mortgage index replaces the composite index which was discontinued.

Together, principal & interest payments of $1,084 rose m/m to 16.6% of median income, but the percentage was down from 17.6% twelve months earlier. This percentage compares to a high of 18.2% last June, and was above the low of 11.6% early in 2013. The median sales price of an existing home rose 4.6% y/y to $280,200. The average mortgage rate declined to 4.11% in May, down from December's high of 4.99%. A 4.6% rise in prices held back the affordability increase during the past year. Growth in median family income slowed to 2.9% y/y in May 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.