U.S. Housing Affordability Improves During November
by:Tom Moeller
|in:Economy in Brief
Summary
- Home prices & interest rates fall.
- Personal income strengthens.
The National Association of Realtors' Fixed Rate Mortgage Housing Affordability Index increased 4.6% (-33.1% y/y) to 95.5 in November after a 5.5% October decline and a 6.9% September shortfall. Affordability is down 45.6% since the most recent high in January 2021.
The November gain occurred as the median price of a home fell 2.1% (+3.2% y/y) to $376,700. It was the fifth consecutive monthly decline. The average mortgage rate eased to 6.81%, but was higher than the December 2020 low of 2.73%. Principal & interest payments declined 3.7% (+57.4% y/y) to $1,967.
Median family income rose 0.8% (5.3% y/y) to $90,211 in November following a 0.9% October gain. That lowered the payment as a percent of income to 26.2%, which remained above its 14.2% level in January 2021.
Affordability rose in each of the four Census regions. In the West, it rose 6.3% (-31.7% y/y) while in the South, it rose 3.9% (-33.8% y/y). In the Midwest, affordability rose 4.4% (-33.5% y/y) while in the Northeast, it increased 6.6% (-32.8% y/y).
The Housing Affordability Index equals 100 when a median-income borrower qualifies for an 80% mortgage on a median-priced existing single-family home. Until the HAI fell below 100 in May 2022 (98.3), it had exceeded 100 in each month since July 1990, reaching its all-time high of 213.3 in January 2013.
Data on Housing Affordability can be found in Haver's REALTOR database. Median home sale prices are also located in USECON. Higher frequency interest rate data can be found in SURVEYW, 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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