At the national level, housing affordability is down from a year ago for the month of November as higher prices make it less affordable to purchase a home despite the lowest mortgage rates in the last 16 months.
• Housing affordability is down from a year ago in November as the median price for a single family home in the US is up from a year ago. Regionally, the Midwest had the biggest increase in price at 7.1% while the Northeast had a slight gain at 2.0%.
• The median single-family home price is $206,200 up 5.6 % from November 2013 as year over year price gains are starting to flatten out. November’s mortgage rate is 4.16, down 22 basis points (one percentage point equals 100 basis points) from last year. Nationally, affordability is down from 173.3 in November 2013 to 170.7 in November 2014.
• Affordability is up slightly from one month ago in all regions, the Northeast having the largest gain at 3.7%. From one year ago, affordability is down in two of the four regions, the Northeast had a 2.6% increase. The Midwest saw the biggest decline in affordability at 2.8 % while the South declined to 1.6% and the West remained flat.
• Positive factors: Low mortgage rates, job creation, and stock market investments are a few of the influences improving consumer confidence. Recently Fanny Mae and Freddie Mac have decided to create new loan programs to help increase credit availability. A boost in incomes would offset home price gains as price growth is coming back to normal levels.
• 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.