U.S. Housing Affordability Weakens Further in April
by:Tom Moeller
|in:Economy in Brief
Summary
- Affordability falls to five-month low.
- Principal & interest payment increases with higher home prices.
- Mortgage rates rise and median family income steadies.
The National Association of Realtors’ Fixed Rate Mortgage Housing Affordability Index fell 5.2% (-6.9% y/y) in April to 95.9 after declining a little-revised 1.9% in March to 101.2. It was the third consecutive monthly decline and left the index down 46.4% 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 April rose 5.7% (12.9% y/y) to $2,209 from $2,090 in March. The median price of an existing single-family home increased 3.9% (5.6% y/y) to $412,100 in April after rising 2.2% in March. The monthly mortgage outlay equaled 26.1% of median family income versus 24.7% in March, though that was down from a high of 27.4% in October. The monthly mortgage rate of 7.07% compared to 6.90% in March. It remained below a high of 7.70% in October. Median family income improved 0.1% (5.0% y/y) to $101,663 from $101,556 in March.
The Housing Affordability Index fell throughout the country in April. In the Midwest, affordability declined 5.3% (-7.4% y/y) to an index level of 125.8. The home affordability Index in the Northeast fell 7.2% (-10.0% y/y) to 94.7. In the South, the index fell 4.0% (-5.1% y/y) to 97.7. The affordability index weakened 5.3% (-9.4% y/y) to 67.3 in the West.
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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