U.S. Housing Affordability Resumes Decline in October
by:Tom Moeller
|in:Economy in Brief
Summary
- Principal & interest payments increase.
- Mortgage rates continue to rise.
- Median sales price of single-family home slips.
The National Association of Realtors’ Fixed Rate Mortgage Housing Affordability Index fell 3.3% in October (-7.7% y/y) to 91.4 following a 2.3% September increase. Affordability is at the lowest level since September 1985. The index is down 48.9% 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 October rose to $2,259 (10.6% y/y) from $2,175. The monthly payment represented an increased 27.4% of median family income. The monthly mortgage rate rose to 7.70%, up from 7.28% in September. Mortgage rates now stand at their highest level since November 2000. The median price of an existing single-family home eased 0.3% (+3.0% y/y) to $396,100 in October.
The Housing Affordability Indexes fell throughout the country in October. In the Northeast, the affordability index dropped 3.2% (-11.7% y/y) to 90.7 while In the Midwest, affordability weakened 1.0% (-8.7% y/y) to an index level of 123.0. In the South, the October index declined 4.0% (-7.7% y/y) to 91.5. In the West, the affordability index fell 2.6% (-6.3% y/y) to 64.3.
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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