U.S. Housing Affordability Index Rises in January; Highest Level Since March ’22
Summary
- Affordability continues to improve, w/ HAI up for three straight months.
- Median sales price of a home falls for seven consecutive months to a one-year low.
- Mortgage rates decline to a four-month-low 6.35%; mortgage payments fall for the third successive month to a five-month low.
- Median family income at a still-high $90,944 (+6.4% y/y).
The National Association of Realtors' Fixed Rate Mortgage Housing Affordability Index rose 3.5% m/m to 104.9 in January after rises of 7.5% to 101.4 in December (101.2 initially) and 3.3% to 94.3 in November. The January reading was the third consecutive m/m gain to the highest HAI level since March 2022. The HAI fell 23.6% y/y after a 28.7% December decrease. The affordability level has plunged 40.2% from the January 2021 high of 175.5 and 41.6% from the April 2020 peak of 179.6.
The January rise occurred as the median price of an existing single-family home fell 2.4% (+0.7% y/y) to $363,100 after a 1.8% December drop to $372,000. It was the seventh straight monthly fall to the lowest level since last January ($360,700). The average mortgage interest rate declined to 6.35% in January, the lowest since September, from 6.44% in December, but it remained above 3.51% last January and the December 2020 low of 2.73%. Principal & interest payments slid 3.3% (+39.3% y/y), the third consecutive m/m slide, to $1,807 per month, the lowest since August, on top of a 6.2% December decrease to $1,869.
Median family income dipped only 0.04% (+6.4% y/y) to $90,944 in January after a 0.9% increase to $90,984 in December. The latest dip followed 11 straight m/m gains starting February 2022. Mortgage payments as a percent of income declined to 23.8% in January, the lowest since last March, from 24.7% in December; these numbers were still up from 18.2% last January and the January 2021 low of 14.2%.
Affordability rose m/m in January in each of the four Census regions, rising 6.9% (-19.2% y/y) in the West, 4.5% (-25.1% y/y) in the Midwest, 3.8% (-22.2% y/y) in the Northeast, and 3.1% (-25.3% y/y) in the South.
The Housing Affordability Index equals 100 when a median-income borrower qualifies for an 80% mortgage on a median-priced existing single-family home. Until the HAI fell below 100 in May 2022 (98.3), it had exceeded 100 in each month since July 1990, reaching its all-time high of 213.3 in January 2013.
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.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has ~20 years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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