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Economy in Brief
Surging Imports Send the EMU Trade Scene Deeper into Deficit
The trade balance for the Euro Area fell sharply to 17.5 billion euros in March...
U.S. Import Prices Hold Steady While Export Prices Rise in April
Import prices held steady m/m (+12.0% y/y) in April...
EMU IP Drops Month-to-Month and Year-over-Year
Industrial output among EMU members fell by 1.8% month-to-month in March...
U.S. Producer Price Inflation Moderates in April
The Producer Price Index for Final Demand increased 0.5% during April...
U.S. Housing Affordability Plunges in March
Affordable homes are in short supply...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation & Fed Policy: A Relationship Which Should Worry The Fed And Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
"Core" GDP Suggests Economy Gained Momentum in Q1:2022
by Tom Moeller March 11, 2022
• Higher mortgage rates drive affordability lower.
• Principal & interest payments surge.
• Payment as a percent of income moves up roughly four percentage points y/y.
Affordable homes were increasingly difficult find in January, even though incomes rose. The National Association of Realtors' Fixed Rate Mortgage Housing Affordability Index fell 2.8% in January to 143.0 from 147.1 in December. Affordability has fallen 22.2% since its recent high of 183.8 in January 2021, which was revised from 187.8. The Housing Affordability Index equals 100 when median family income equals the amount required for an 80% mortgage on a median-priced existing single-family home.
In January, a 1.2% decline (+15.9% y/y) in the median sales price of a home to $357,100 was accompanied by a rise in mortgage rates to 3.51% in January, up from 2.79% twelve months earlier. As a result, the monthly mortgage payment rose 3.4% to a record $1,284 (27.0% y/y) from $1,242 in December.
Median family income in January rose 0.5% (-1.2% y/y) to $88,114 from $87,683 in December. Consequently, the standard mortgage payment as a percent of income rose to 17.5%, the highest level since August 2018. These figures are up from a recent low of 13.6% in January 2021.
Data on Housing Affordability can be found in Haver's REALTOR database. Median home sale prices are also located in USECON. Higher frequency interest rate data can be found in SURVEYW, WEEKLY, and DAILY.
Housing Affordability | Jan | Dec | Nov | Y/Y % | 2021 | 2020 | 2019 |
---|---|---|---|---|---|---|---|
Fixed Rate Mortgage Housing Affordability Index (100+=More Affordable) | 143.0 | 147.1 | 147.4 | -22.2 | 155.8 | 172.3 | 161.3 |
Payment as a Percent of Income | 17.5 | 17.0 | 17.0 | 13.6 | 16.2 | 14.5 | 15.5 |
Principal and Interest Payment ($) | 1,284 | 1,242 | 1,237 | 27.0 | 1,182 | 1,028 | 1,044 |
Monthly Mortgage Rate (%) | 3.51 | 3.15 | 3.12 | 2.79 | 3.01 | 3.17 | 4.04 |
Median Family Income ($) | 88,114 | 87,683 | 87,501 | -1.2 | 87,965 | 84,969 | 80,808 |
Median Sales Price (Existing Single-Family Home, $) | 357,100 | 361,300 | 361,300 | 15.9 | 349,917 | 298,708 | 272,333 |