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Economy in Brief
German PPI Inflation Downshifts
In the short term, much of what happens to PPI inflation is determined by oil prices...
Widespread Gain for U.S. Leading Economic Indicators in July
The Conference Board's Composite Index of Leading Economic Indicators increased 0.3% m/m (3.9% y/y) in July...
U.S. Industrial Production Increases Modestly; Factory Output Slips
Industrial production improved 0.2% during July (2.2% y/y)...
Philadelphia Fed Factory Conditions Index Eases
The Philadelphia Fed that its General Factory Sector Business Conditions Index slipped to 18.9 during August...
U.S. Initial Unemployment Insurance Claims Fall
Initial unemployment insurance applications declined to 232,000 (-9.8% y/y) during the week ended August 12...
U.S. Housing Starts & Building Permits Decline
Total housing starts fell 4.8% to 1.155 million units (AR, -5.4% y/y) during July...
by Tom Moeller May 9, 2016
The National Association of Realtors reported that the Composite Index of Home Affordability declined 2.6% during April to 169.3 following two months of increase. The index remained down 2.4% versus 12-months earlier. During the last ten years, there has been a 62% correlation between the affordability index level and the y/y change in existing single-family home sales.
The median sales price of an existing home strengthened 5.0% (5.8% y/y) to the highest level in three months. The rise was partially offset by a decline in the average mortgage rate to 3.87%, the lowest level in nearly three years. On balance, principal & interest payments rose to $843, or 14.8% of median income. That compared to a low of 11.7% early in 2013.
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 more buyers can afford to enter the home-buying market. Data on Home Affordability can be found in Haver's REALTOR database. Interest rate data can be found in the WEEKLY and DAILY databases.
| Housing Affordability | Mar | Feb | Jan | Mar Y/Y | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| Composite Index | 169.3 | 173.8 | 171.2 | -2.4% | 166.1 | 167.8 | 179.7 |
| Median Sales Price (Existing Single Family Home) | $224,300 | $213,600 | $214,800 | 5.8% | $221,350 | $207,125 | $195,933 |
| Monthly Mortgage Rate | 3.87% | 4.04% | 4.12% | 3.95% | 4.03% | 4.30% | 4.00% |
| Principal and Interest Payment | $843 | $820 | $832 | 4.7% | $849 | $820 | $750 |
| Median Family Income | $68,509 | $68,405 | $68,379 | 2.1% | $67,507 | $65,910 | $64,030 |
| Payment as a Percent of Income | 14.8 | 14.4 | 14.6 | 14.4 | 15.1 | 14.9 | 14.0 |
