U.S. Housing Affordability Down 6.3% in June
Summary
- Home prices up from May but down from a year ago.
- Mortgage rates up.
- Average mortgage payment largest % of income since 1985.
The National Association of Realtors’ Fixed Rate Mortgage Housing Affordability Index fell in June by 6.3% (-7.1% y/y) to 87.8, following a 3.4% decrease in May, revised from -3.3% initially reported. Affordability has fallen now for five consecutive months. The index is down 51.1% from its recent peak of 179.8 in April 2020. Its all-time high was 213.3 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. That is, the index is a measure of borrowers’ qualifications, not a percentage of some specific time period, as is the case with many economic indexes.
The median price of an existing single-family home was $416,000 in June, up 3.6% from May but down 1.2% from June 2022. In May, the price had risen 2.9%. The monthly mortgage rate averaged 6.79% in June, following 6.51% in May and the highest since last November. These measures meant the average mortgage payment of principal and interest in June was $2,167, up from $2,032 in May. The June payment represented 28.5% of median family income, up from 26.7% in May, and the largest share since 28.7% in January 1985.
Among the four Census regions of the country, the Housing Affordability Indexes declined in June in every region, with the steepest in the Northeast, 10.7% (-12.3% y/y) to 85.5. In the Midwest, the HAI fell in June to 113.7, down 7.3% (-10.0% y/y). In the South, the June decline was 4.5% (-6.9% y/y) to 89.4, and in the West, the HAI fell 4.2% (-4.5% y/y) in the month to 64.1.
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.
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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