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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 |
