At the national level, housing affordability is up for the month due to a break in mortgage rates and home prices gains but affordability will be down for the year. What is affordability like in your market?
- Housing affordability is up for the month of November as mortgage rates and the median price for a single family home in the US decreased slightly from October. In spite of the decrease, the median single-family home price is up 9.4 % from last year keeping prices moving at a high year-over-year pace.
- As a result of higher home prices and mortgage rates that are up 25.1%, nationally, affordability is down from 203 in November 2012 to 170.3 in November 2013.
- Home prices are expected to slow down while inventory figures improve. Income levels are up and should help consumer confidence before rates begin to rise for the coming year.
- By region, affordability is up from one month ago in all regions. The Midwest had the biggest gain in affordability at 3.4%. From one year ago, affordability is down in all regions. The West saw the biggest decline in affordability as a result of having the largest price gain at 15.9 %.
- Mortgage rates are expected to increase as the Fed reduces bond purchases and eventually begins to tighten monetary policy. For a look at how the housing market might respond to a change in rates, I recommend this Stress Test by Chief Economist Lawrence Yun.
- What does housing affordability look like in your market? View 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.