• Housing affordability jumps to its highest rate since March 2016.

• Strength in home prices is offset by improvement in income & lower mortgage rates.

The National Association of Realtors reported that its Fixed Rate Mortgage Housing Affordability Index jumped 5.9% (11.8% y/y) to 171.7 in April, the highest level in roughly four years.

The effective mortgage interest rate declined to 3.37% in April from 3.51% in March, down from a recent peak of 4.99% in December 2018. Median family incomes, which are projected by the National Association of Realtors, rose 7.0% y/y to $84,065, pushing the share of income devoted to mortgage payments down to 14.6%, the lowest level since November 2016. The median price of a single-family home increased 7.3% y/y to $288,700 in April. Principle & interest payments edged slightly higher to $1,020 per month.

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. Median sales prices are located in USECON. Higher frequency interest rate data can be found in SURVEYW, WEEKLY, and DAILY.