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Economy in Brief
U.S. Energy Product Prices Remain Under Pressure
Regular gasoline prices held steady at $2.32 per gallon last week (12.1% y/y) for the third straight week...
German Federal Debt Levels Fall
German debt level fell outright in Q4 2016 as the ratio of federal debt-to-GDP also fell...
NABE 2018 Forecast: Modest Improvement in Economic Growth & Higher Inflation
The NABE expects 2.5% real U.S. economic growth in 2018 compared to 2.3% forecast for 2017...
Texas Factory Sector Activity Remains Strong
The Dallas Fed indicated in its Texas Manufacturing Outlook Survey that the General Business Activity Index eased during March...
EMU Money and Credit Growth Are Less Than Impressive Than Euro-PMIs
EMU nominal money supply growth is slightly higher over three months, but credit growth in the EMU is slower...
Durable Goods Orders Strengthened by Another Jump in Aircraft
New orders for durable goods rose 1.7% (5.0% y/y) during February...
by Tom Moeller August 10, 2016
The National Association of Realtors reported that the Composite Index of Home Affordability declined 3.8% during June to 153.3, the lowest level since November 2008. The index was 28.5% below its peak in January 2013. During the last ten years, there has been a 63% correlation between the affordability index level and the y/y change in existing single-family home sales.
Higher prices have reduced affordability. The median sales price of an existing home strengthened 4.0% to a record high of $249,800, up 5.0% y/y. The price rise was accompanied by an average mortgage rate of 3.84%, little changed m/m at the lowest level in nearly three years. Together, principal & interest payments rose to $936 or 16.3% of median income, the highest percentage since November 2008. That percentage 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||Jun||May||Apr||Jun Y/Y||2015||2014||2013|
|Median Sales Price (Existing Single Family Home)||$249,800||$240,300||$232,000||5.0%||$221,350||$207,125||$195,933|
|Monthly Mortgage Rate||3.84%||3.83%||3.89%||3.95%||4.03%||4.30%||4.00%|
|Principal and Interest Payment||$936||$899||$874||3.1%||$849||$820||$750|
|Median Family Income||$68,897||$68,759||$68,665||2.1%||$67,507||$65,910||$64,030|
|Payment as a Percent of Income||16.3||15.7||15.3||16.1||15.1||14.9||14.0|