The National Association of Realtors reported that its Fixed Rate Mortgage Housing Affordability Index improved 4.1% m/m (9.2% y/y) to 168.4 in January following a 1.2% decline during December. It was the highest level of affordability since November 2016, but remained below the all-time high of 213.3 reached in January 2013.

In January, the effective mortgage interest rate declined ten basis points to 3.68% and remained below the 4.99% recorded in November of 2018. Monthly principal and interest payments fell to $987 from $1,030 in December. They declined to 14.8% of income, the lowest level since November 2016. The median sales price of a home increased 6.9% y/y to $268,600. Median family income rose 2.7% y/y to $79,796.

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 an increasing number of buyers can qualify for a mortgage to purchase the median-priced home. Data on Home Affordability can be found in Haver's REALTOR database. Interest rate data can be found in the WEEKLY and DAILY databases.