affordability

November 2016 Housing Affordability Index

After moving up in four consecutive months at the national level, housing affordability is down 1.1 from last month and down from a year ago. Mortgage rates increased to 3.82 this November and current home shoppers may want to lock in at current rates before they rise again.

  • Housing affordability declined from a year ago in November moving the index down 1.8 percent from 169.9 to 166.8. The median sales price for a single family home sold in November in the US was $236,500 up 6.8 percent from a year ago. Bonus equity gains for owners but not helpful to potential homebuyers.
  • Nationally, mortgage rates were down 19 basis points from one year ago (one percentage point equals 100 basis points) while incomes rose 2.4 percent.
  • Regionally, the South had the biggest increase in price at 9.1 percent. The West had an increase of 8.5 percent while the Midwest had a 6.6 percent gain in price. The Northeast had the smallest increase of 2.5 percent.
  • Regionally, the Northeast was the only region that saw an increase in affordability from a year ago. The Northeast had an increase of 2.0 percent. The Midwest had the smallest decline of 1.3 percent. The West had a decline in affordability of 3.5 percent while the South had the largest decline of 4.5 percent.
  • By region, affordability is down regions from last month. The Northeast had the biggest decline of 3.5 percent. The South followed with a decline of 1.2 percent and the Midwest had a decline of 0.4 percent. The West had the smallest decline in affordability of 0.2 percent.
  • Despite month-to-month changes, the most affordable region is the Midwest where the index is 215.2. The least affordable region remains the West where the index is 119.3.  For comparison, the index is 168.4 in the South, 172.2 in the Northeast.
  • Mortgage applications are currently up this week. Modest changes to the credit box could help offset rate increases. Rents are up 3.9 percent and rising while vacancy rates are low. Housing shortages will distress the opportunities of first time homebuyers.
  • 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 (principal and interest payment to income). See further details on the methodology and assumptions behind the calculation here.

affordability

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