At the national level, housing affordability is down due to higher prices and steady rising mortgage rates. What is affordability like in your market?
- Housing affordability is down for the month of July in the United States, as prices remain 13.4% higher than a year ago. Mortgage rates, as measured by the FHFA monthly survey based on July home sales closing, are the highest since February 2012.
- Incomes are slightly higher and mortgage rates are up abruptly from last month and a year ago, but the average homebuyer can still take advantage of historically low rates.
- By region, affordability is down from one month ago in all regions, with the West having the biggest drop. From one year ago, affordability is down in all regions. The West has had the largest price gain, at 18.4%, while the Northeast has had the smallest, at 6%.
- Affordability will probably decline again next month if prices continue to rise along with very little movement in income levels. Affordability could strengthen in the months to come, as prices have decreased from a month ago and most likely reached their seasonal peak for the year. Even with rates increasing, certain metro areas have healthy inventory levels and consumers can still look to purchase before those historically low rates are a thing of the past.
- Check out the full data release here.
- The Housing Affordability Index calculation assumes a 20 percent down payment and a 25 percent qualifying ratio (principle and interest payment to income). See further details on the methodology and assumptions behind the calculation here.