Global| Jan 17 2020U.S. Housing Affordability Edged Up in November
by:Sandy Batten
|in:Economy in Brief
Summary
The National Association of Realtors reported that its Fixed Rate Mortgage Housing Affordability Index edged up 0.3% m/m (13.9% y/y) to 163.8 in November from 163.3 in October. This was the fifth monthly increase in the past six [...]
The National Association of Realtors reported that its Fixed Rate Mortgage Housing Affordability Index edged up 0.3% m/m (13.9% y/y) to 163.8 in November from 163.3 in October. This was the fifth monthly increase in the past six months and the second highest reading since January 2018 (the highest being 164.8 in September). Though the index has generally been improving since mid-2018, it remains well below its all-time high of 213.3 reached in January 2013.
In November, monthly principal and interest payments edged up to $1,015 from $1,013 in October but remained at 15.3% of income. The median sales price was little changed in November after having falling in each of the previous four months. Median family income continued to increase, rising to $79,824 in November to be 3.7% higher than a year ago. The effective mortgage interest rate edged up one basis point to 3.75% in November, but remains well below the 4.99% recorded in November a year ago.
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 an increasing number of buyers can qualify for a mortgage to purchase the median-priced home. 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 | Nov | Oct | Sep | Nov Y/Y | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| Fixed Rate Housing Affordability Index | 163.8 | 163.3 | 164.8 | 13.9% | 147.8 | 159.1 | 167.7 |
| Payment as a Percent of Income | 15.3 | 15.3 | 15.2 | 17.4 | 17.0 | 15.7 | 14.9 |
| Principal and Interest Payment | $1,015 | $1,013 | $1,004 | $1,115 | $1,079 | $967 | $880 |
| Median Sales Price (Existing Single Family Home) | $274,000 | $273,800 | $274,400 | $259,900 | $259,458 | $247,508 | $233,642 |
| Monthly Fixed Mortgage Rate | 3.75% | 3.74% | 3.65% | 4.99% | 4.72% | 4.20% | 3.88% |
| Median Family Income | $79,824 | $79,425 | $79,422 | $76,968 | $76,322 | $73,891 | $71,062 |
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
