U.S. Housing Affordability Improves in September
- Principal & interest payments fall.
- Mortgage rates rise further.
- Median sales price of single-family home declines sharply.
The National Association of Realtors’ Fixed Rate Mortgage Housing Affordability Index rose 1.8% in September (-9.7% y/y) to 94.1 following a 1.6% August decline. Despite the rise, affordability remains near the lowest level since December 1985. The index is down 47.4% from its recent peak of 179.0 in April 2020. Its all-time high was 213.3 in January 2013.
The Housing Affordability Index (HAI) equals 100 when borrowers’ median income qualifies for an 80% mortgage on a median-priced existing single-family home.
The median price of an existing single-family home fell 2.7% (+2.5% y/y) to $399,200 in September. The monthly mortgage rate rose, however, to 7.28%, up from 7.15% in August. Mortgage rates now stand at their highest level since January 2001. Despite the rate rise, the average mortgage payment of principal & interest in September eased to $2,185 (+14.7% y/y) from $2,216. The September payment represented a lessened 26.6% of median family income.
Amongst the four Census regions of the country, the Housing Affordability Indexes were mixed in September. In the Northeast, the affordability index improved 5.9% (-12.1% y/y) to 93.7 while In the Midwest, affordability improved 3.1% (-11.6% y/y) to an index level of 123.9. In the South, the September index weakened 0.4% (-9.9% y/y) to 94.2 and in the West, the affordability index slipped 0.5% (-9.0% y/y) to 66.0.
Data on Housing Affordability can be found in Haver’s REALTOR database. Median home sales prices are also available in USECON. Higher frequency interest rate data are found in SURVEYS, WEEKLY and DAILY.
Tom MoellerAuthorMore 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.