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by Tom Moeller November 15, 2019
The National Association of Realtors reported that its Fixed Rate Mortgage Housing Affordability Index rose 2.8% to 164.3 during September (11.5% y/y), the fourth consecutive month of increase. Despite the rise, affordability remained roughly one-quarter below the peak level in January 2013.
The September improvement in affordability occurred as principal & interest payments fell m/m to 15.2% of median income, the lowest percentage since January 2018. The percentage remained below its 18.2% peak in June of that year. The median sales price of an existing home eased 2.4% (+6.1% y/y) to $275,100. Payments also were pulled lower as the average mortgage interest rate in September dipped to 3.65%, remaining sharply below the high of 4.99% at the end of last year. Monthly principal & interest payments fell slightly m/m to $1,007 per month (-7.2% y/y). The y/y growth in median family income of 3.5% has been fairly steady this 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 | Sep | Aug | July | Sep Y/Y | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| Fixed Rate Housing Affordability Index | 164.3 | 159.8 | 155.3 | 11.5% | 147.8 | 159.1 | 167.7 |
| Payment as a Percent of Income | 15.2 | 15.6 | 16.1 | 17.0 | 17.0 | 15.7 | 14.9 |
| Principal and Interest Payment | $1,007 | $1,033 | $1,060 | -7.2% | $1,079 | $967 | $880 |
| Median Sales Price (Existing Single Family Home) | $275,100 | $281,900 | $283,600 | 6.1% | $259,458 | $247,508 | $233,642 |
| Monthly Fixed Mortgage Rate | 3.65% | 3.66% | 3.82% | 4.77% | 4.72% | 4.20% | 3.88% |
| Median Family Income | $79,422 | $79,218 | $79,006 | 3.5% | $76,322 | $73,891 | $71,062 |
