U.S. Housing Affordability Declines in February

The National Association of Realtors’ Fixed Rate Mortgage Housing Affordability Index fell 2.6% in February (-5.8% y/y) to 103.0, reversing a 3.4% January increase. The index remained down 42.5% from its recent peak of 179.0 in April 2020. Its all-time high of 213.3 occurred in January 2013. The Housing Affordability Index (HAI) equals 100 when borrowers’ median income qualifies for an 80% mortgage on a median-priced existing single-family home.

The average mortgage payment of principal & interest in February rose 3.0% (11.5% y/y) to $2,040 from $1,981 in January. The monthly payment represented an increased 24.3% of median family income, down from a high of 27.4% in October. The monthly mortgage rate rose to 6.86% from 6.72% in January. It remained below a high of 7.70% in October. The median price of an existing single-family home increased 1.5% (5.6% y/y) to $388,700 in February.

The Housing Affordability Index fell throughout most the country in February. In the Midwest, affordability declined 3.5% (-6.7% y/y) to an index level of 139.5. In the South, the February index fell 3.8% (-4.1% y/y) to 102.5. In the West, the affordability index was off 3.8% (-8.6% y/y) to 72.6. Moving the other way, the Home Affordability Index in the Northeast improved 2.4% (-11.4% y/y) to 104.5.

Data on Housing Affordability can be found in Haver’s REALTOR database. Median home sales prices are also available in USECON. Higher frequency interest rate data are found in SURVEYS, WEEKLY and DAILY.