U.S. Housing Affordability Index Falls in April to the Lowest Level since Aug. '07
Summary
- Affordable homes continue to be in short supply; mortgage payments jump to a record high w/ home prices at a record high.
- Mortgage interest rates increase to the highest since May 2010.
- Median family income rises to $89,985, the highest level since March 2021.
The National Association of Realtors' Fixed Rate Mortgage Housing Affordability Index fell 12.1% m/m (-29.3% y/y) to 109.2 in April after drops of 7.7% to 124.2 in March and 5.9% to 134.6 in February. The April reading was the deepest of seven straight monthly falls to the lowest level since August 2007. Affordability has plunged 40.6% since its January peak of 183.8. The Housing Affordability Index equals 100 when median family income qualifies for an 80% mortgage on a median priced existing single-family home. This index has been above 100 in each month since July 1990, reaching its all-time high of 213.3 in January 2013.
Affordability was reduced in April as the median sales price of a home rose 4.3% (14.8% y/y) to $397,600, the third successive monthly rise to a record high, on top of a 4.2% increase to $381,300 in March. That raised principal & interest payments to a record $1,717 per month (45.0% y/y) from $1,499. The effective mortgage interest rate rose to 5.05% in April from 4.24% in March, registering the highest since May 2010 and up from 3.11% in April 2021.
Median family income rose 0.7% (2.5% y/y) to $89,985 in April, the seventh consecutive m/m gain, after rises of 1.1% to $89,381 in March and 0.4% to $88,424 in February; however, it remained 6.0% below the March 2021 high of $95,696. Mortgage payments as a percent of income increased to 22.9%, the highest since July 2007, from 20.1%; these numbers were up from 16.2% last April and a recent low of 13.6% in January 2021.
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.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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