U.S. Housing Affordability Falls in March
by:Tom Moeller
|in:Economy in Brief
Summary
- Principal payments rise with higher home prices.
- Mortgage rates are steady.
- Median family income increases.
The National Association of Realtors’ Fixed Rate Mortgage Housing Affordability Index fell 2.0% in March (-2.3% y/y) to 101.1 after declining 2.4% in February to 103.2. The index remained down 43.5% 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 March rose 2.8% (7.7% y/y) to $2,093 from $2,036 in February. The median price of an existing single-family home increased 2.4% (4.7% y/y) to $397,200 in March after rising 1.3% in February. The monthly mortgage outlay equaled 24.7% of median family income versus 24.2% in February, down from a high of 27.4% in October. The monthly mortgage rate of 6.90% compared to 6.86% in February. It remained below a high of 7.70% in October. Median family income improved 0.7% (5.2% y/y) to $101,556 from $100,876 in February.
The Housing Affordability Index fell throughout the country in March. In the Midwest, affordability declined 4.3% (-4.9% y/y) to an index level of 132.8. The home affordability Index in the Northeast fell 2.4% (-7.4% y/y) to 102.0. In the South, the index fell 1.5% (-0.6% y/y) to 101.6. In the West, the affordability index was off 1.5% (-3.9% y/y) to 72.5.
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.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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