• Income eases after falling sharply in April minus government stimulus payouts.

• Mortgage payments rise again with higher home prices.

• Interest rates ease.

The National Association of Realtors' Fixed Rate Mortgage Housing Affordability Index declined 2.6% during May (-15.7% y/y) to 151.7 from 155.8 in April. Affordability has fallen 18.4% since January. A Housing Affordability Index of 100 indicates that a family earning the median income qualifies for an 80% mortgage on a median-priced existing single-family home. This index has been above 100 in each month since July 1990, reaching its all-time high of 213.3 in January 2013.

Affordability was reduced during May as median family income declined 1.0% to $87,689 (+1.2% y/y). In addition, the median sales price for an existing single-family home rose 3.0% (24.4% y/y) to $356,600, the fourth straight month of strong increase. That raised the principal & interest payments to $1,204 (20.0% y/y). Payments as a percent of income rose to 16.5%, the highest level in two years.

Holding back the increase in mortgage payments in May was a decline in the effective mortgage interest rate to 3.01% from 3.11% in April. The rate reached a high of 4.99% late in 2018.

Data on Housing Affordability can be found in Haver's REALTOR database. Median home sale prices also are located in USECON. Higher frequency interest rate data can be found in SURVEYW, WEEKLY, and DAILY.