• Declines in home prices & interest rates boost buying power.

The National Association of Realtors reported that its Fixed Rate Mortgage Housing Affordability Index rose 0.7% (-0.7% y/y) to 168.2 in November from 167.0 in October, revised from 167.2. Despite the increase, affordability remained 7.9% below its April high.

Declines amongst index components were widespread in November. Payments as a percent of income slipped to 14.9% from 15.0% as principal & interest payments declined 1.5% (+2.4% y/y) to $1,040. The effective mortgage interest rate declined to a record low of 2.82% in November (figures date back to 1981). The median sales price eased 0.7% (+15.1% y/y) to $315,500 from October's record high of $317,800. These declines offset a 0.8% fall (+1.7% y/y) in median family income to $83,977.

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.