U.S. Housing Affordability Increases in December
by:Tom Moeller
|in:Economy in Brief
Summary
- Principal & interest payments decline.
- Mortgage rates weaken.
- Median sales price of single-family home slips.
The National Association of Realtors’ Fixed Rate Mortgage Housing Affordability Index rose 8.2% in December (-6.8% y/y) to 101.9 following a 3.1% November increase. Affordability is at the highest level since April. The index remained down 43.1% from its recent peak of 179.0 in April 2020. Its all-time high of 213.3 occurred 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 average mortgage payment of principal & interest in December fell to $2,039 (+9.1% y/y) from $2,198 in November. The monthly payment represented a lessened 24.5% of median family income, down from 27.4% in October. The monthly mortgage rate declined sharply to 6.90% from 7.52% in November and a high of 7.70% in October. The median price of an existing single-family home declined 1.3% (+4.0% y/y) to $397,000 in December.
The Housing Affordability Indexes rose throughout the country in December. In the Northeast, the affordability index increased 7.5% (-11.7% y/y) to 101.4. In the Midwest, affordability improved 9.0% (-8.3% y/y) to an index level of 138.5. In the South, the December index rose 6.7% (-6.2% y/y) to 101.3. In the West, the affordability index jumped 11.2% (-7.3% y/y) to 72.5.
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 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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