Recent Updates
- **EIA releases, including WPSR, are delayed by the source**
- US: New Residential Sales (May)
- Canada: Payroll Employment, Earnings, & Hours (Apr)
- Italy: Non-EU International Trade (May)
- Mexico: Economic Activity (Apr), Construction (Apr)
- more updates...
Economy in Brief
Italian Consumer Confidence Remains Hammered Down
Italy's consumer confidence fell month-to-month...
U.S. Current Account Deficit Deepens to Record in Q1'22
The U.S. current account deficit deepened to $291.4 billion during Q1'22...
Kansas City Fed Manufacturing Index Declines Further in June But Remains Positive
The Kansas City Fed reported that its manufacturing sector business activity index fell to 12 in June...
U.S. Unemployment Claims Edged Down
Initial claims for unemployment insurance filed in the week ended June 18 declined by 2,000 to 229,000...
U.S. Energy Prices Reverse Earlier Gains
Retail gasoline prices surged to $5.01 per gallon (63.1% y/y)...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller February 12, 2021
• Declines in home prices & interest rates boost buying power.
• Monthly payments move lower.
The National Association of Realtors reported that its Fixed Rate Mortgage Housing Affordability Index jumped 2.1% (2.8% y/y) to 171.8 during December following a 0.7% gain to 168.2 in November. Despite the increase, affordability remained 6.0% below its April high.
Declines amongst index components were widespread in December. Payments as a percent of income eased to 14.5% from 14.9%. They were below the June 2018 high of 18.1%. Principal & interest payments declined 1.7% (-0.8% y/y) to $1,022, down for the fourth straight month. The effective mortgage interest rate declined to a record low of 2.73% in December (figures date back to 1981). That compared to a late-2018 high of 4.99% and an average 15.38% in 1982. The median sales price eased 0.6% (+13.2% y/y) to $313,700, down from October's record high of $317,800. These declines were accompanied by a 0.4% rise (1.9% y/y) in homebuyers' median family income to $84,290.
The Housing Affordability Index equals 100 when median family income qualifies for an 80% mortgage on a median-priced existing single-family home. A rising index indicates an increasing number of buyers can qualify for a mortgage to purchase the median-priced home. Data on Home Affordability can be found in Haver's REALTOR database. Median sales prices are located in USECON. Higher frequency interest rate data can be found in SURVEYW, WEEKLY, and DAILY.
The Budget and Economic Outlook: 2021 to 2031 from the Congressional Budget Office is available here.
Housing Affordability | Dec | Nov | Oct | Y/Y% | 2020 | 2019 | 2018 |
---|---|---|---|---|---|---|---|
Fixed Rate Mortgage Housing Affordability Index (100+=More Affordable) | 171.8 | 168.2 | 167.0 | 2.8 | 172.0 | 161.1 | 147.9 |
Payment as a Percent of Income | 14.5 | 14.9 | 15.0 | 14.9 | 14.5 | 15.5 | 17.0 |
Principal and Interest Payment ($) | 1,022 | 1,040 | 1,056 | -0.8 | 1,028 | 1,044 | 1,079 |
Monthly Mortgage Rate (%) | 2.73 | 2.82 | 2.88 | 3.78 | 3.17 | 4.04 | 4.72 |
Median Family Income ($) | 84,290 | 83,977 | 84,672 | 1.9 | 84,843 | 80,704 | 76,401 |
Median Sales Price (Existing Single-Family Home, $) | 313,700 | 315,600 | 317,800 | 13.2 | 298,708 | 272,333 | 259,458 |