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Economy in Brief
U.S. Productivity Weakness Revised Little; Unit Labor Costs Still Firm
Productivity growth in the nonfarm business sector last quarter was revised to -0.2% at an annual rate (+1.5%) y/y...
U.S. Gasoline and Nat Gas Prices Fall While Crude Oil Prices Were Mixed
In the week ended December 9, retail gasoline prices edged down to $2.56 per gallon (+5.8% y/y)...
ZEW Assessments and Expectations Improve But Gain Less Markedly
The ZEW global macroeconomic assessments have improved along a broad front in December following a surge of improvement in November...
NABE Projections for Moderate Growth and Inflation Are Little Revised
The National Association for Business Economics expectations of 1.8% growth in real GDP during 2020...
German Trade Data Tell a Tale of Two Germanys
Germany's October trade report is better than expected...
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 |
