Global| Feb 14 2020U.S. Housing Affordability Declines As House Prices Rise
by:Tom Moeller
|in:Economy in Brief
Summary
The National Association of Realtors reported that its Fixed Rate Mortgage Housing Affordability Index fell 1.2% m/m (+10.4% y/y) to 161.8 in December from 163.7 in November. It was the lowest level of affordability since August and [...]
The National Association of Realtors reported that its Fixed Rate Mortgage Housing Affordability Index fell 1.2% m/m (+10.4% y/y) to 161.8 in December from 163.7 in November. It was the lowest level of affordability since August and remained well below the all-time high of 213.3 reached in January 2013.
In December, monthly principal and interest payments increased to $1,030 from $1,016 in November.
and rose to 15.5% of income. The median sales price increased 8.0% y/y to $277,000. Median family income continued to increase, rising to $79,970, up 3.3% y/y. The effective mortgage interest rate edged up three basis points to 3.78% in December, but remained below the 4.99% recorded in November of 2018.
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. Interest rate data can be found in the WEEKLY and DAILY databases.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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