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Economy in Brief
U.S. Home Builder Sentiment Improves Slightly
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by Tom Moeller August 7, 2019
The National Association of Realtors reported that its Fixed Rate Mortgage Housing Affordability Index improved 1.3% to 151.9 during June (10.3% y/y) after falling 1.6% in May. Despite the increase, affordability remained 28.8% below the peak level during January 2013.
The affordability increase occurred in June as principal & interest payments eased m/m to 16.5% of median income from 16.7% in May. The percentage remained below its 18.2% peak in June 2018, but above the low of 11.6% in January 2013. Payments were pulled lower as the average mortgage interest rate declined to 3.84% in June from 4.11% in May and was sharply below December's high of 4.99%. Monthly principal & interest payments fell slightly to $1,082 per month. The median sales price of an existing home rose 4.5% y/y to $288,900. Growth in median family income picked up to 3.5% y/y in June from 3.4% during all of last year.
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 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| Fixed Rate Housing Affordability Index | 151.9 | 150.0 | 152.5 | 10.3% | 147.8 | 159.1 | 167.7 |
| Payment as a Percent of Income | 16.5 | 16.7 | 16.4 | 18.2 | 17.0 | 15.7 | 14.9 |
| Principal and Interest Payment | $1,082 | $1,087 | $1,065 | -6.2% | $1,079 | $967 | $880 |
| Median Sales Price (Existing Single Family Home) | $288,900 | $280,900 | $269,100 | 4.5% | $259,458 | $247,508 | $233,642 |
| Monthly Fixed Mortgage Rate | 3.84% | 4.11% | 4.30% | 4.74% | 4.72% | 4.20% | 3.88% |
| Median Family Income | $78,916 | $78,238 | $77,944 | 3.5% | $76,396 | $73,891 | $71,062 |
