Economists' Outlook

Housing stats and analysis from NAR's research experts.

August 2016 Housing Affordability Index

At the national level, housing affordability is up from a year ago for the second consecutive month. Mortgage rates are down again and stood at 3.74 this August though increases are on the horizon.

  • Housing affordability increased from a year ago in August pushing the index up 2.2 percent from 160 to 163.5. The median sales price for a single family home sold in August in the US was $242,200 up 5.3 percent from a year ago.
  • Nationally, mortgage rates were down 41 basis points from one year ago (one percentage point equals 100 basis points) while incomes modestly rose 2.4 percent.
  • The West had the biggest increase in price at 8.7 percent. The South had an increase of 7.1 percent while the Midwest had a 5.7 percent gain in price. The Northeast had the smallest increase of 0.8 percent.
  • Regionally, two of the four regions saw increases in affordability from a year ago. The Northeast had the biggest increase of 6.4 percent followed by the Midwest with a modest increase of 1.1 percent. The South had the only decline in affordability of 0.1 percent while the West remained flat.
  • By region, affordability is up in all regions from last month. The Northeast had the biggest increase of 2.9 percent. The Midwest followed with a gain of (2.5 percent) and the South had a gain of (1.9 percent). The West had the smallest increase in affordability of 0.4 percent.
  • Despite month to month changes, the most affordable region is the Midwest where the index is 204. The least affordable region remains the West where the index is 119.2.  For comparison, the index is 166 in the South, 165.1 in the Northeast.
  • Mortgage applications are currently up this week and rates remain historically low. Purchase mortgage applications are also currently up this week.
  • 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.



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