Recent Updates

  • US: Job Openings & Labor Turnover Survey (Oct), ADP Employment (Nov), GDP & Corp Profits (Q3-2nd), Advance Trade & Inventories (Oct)
  • Serbia: Retail Sales (Oct)
  • US: Chicago PMI (Nov)
  • more updates...

Economy in Brief

U.S. Housing Affordability Declines in October to the Lowest Level since June
by Winnie Tapasanun  December 10, 2021

• Mortgage payments jump with higher home prices.

• Family income rises to the highest level since July.

• Interest rates increases to the highest since March.

The National Association of Realtors' Fixed Rate Mortgage Housing Affordability Index fell 2.3% m/m (-11.5% y/y) to 148.2 in October after rises of 0.5% to 151.7 in September and 0.2% to 150.9 in August. The October reading was the first monthly fall and the lowest level since June. Affordability has fallen 21.1% since its January high of 187.8. A Housing Affordability Index of 100 indicates that median family 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 in October as the median sales price of a home rose 0.8% (13.5% y/y) to $360,800, the first m/m rise since June, after a 1.9% September decline to $357,900. That raised principal & interest payments to $1,236 per month (17.0% y/y), a four-month high, from $1,199. Payments as a percent of income rose to 16.9%, the highest since June, from 16.5%.

Median family income rose 0.7% (3.6% y/y) to $87,941 in October, a three-month high, after drops of 0.6% to $87,300 in September and 0.7% to $87,865 in August, but it remained 10.6% below the March high of $98,331. The effective mortgage interest rate rose to 3.12% in October, the highest since March, from 2.95% in September. It reached a high of 4.99% in late-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.

Housing Affordability Oct Sep Aug Y/Y % 2020 2019 2018
Fixed Rate Mortgage Housing Affordability Index (100+=More Affordable) 148.2 151.7 150.9 -11.5 172.3 161.3 147.9
  Payment as a Percent of Income 16.9 16.5 16.6 14.9 14.5 15.5 17.0
  Principal and Interest Payment ($) 1,236 1,199 1,213 17.0 1,028 1,044 1,079
  Monthly Mortgage Rate (%)   3.12 2.95 2.89 2.88 3.17 4.04 4.72
  Median Family Income ($) 87,941 87,300 87,865 3.6 84,969 80,808 76,401
  Median Sales Price (Existing Single-Family Home, $) 360,800 357,900 364,700 13.5 298,708 272,333 259,458
close
large image