- At the national level, housing affordability is down from a year ago for the month of August as higher prices make it less affordable to purchase a home despite rates having another slight decline.
- Housing affordability is down from a year ago in August as the median price for a single family home in the US increased from a year ago but declined slightly from last month.
- The median single-family home price is $220,600 up 5.2 % from August 2013 as year over year price gains are currently slowing down. Mortgage rates are down 17 basis points (one percentage point equals 100 basis points) from last year. Nationally, affordability is down from 159.9 in August 2013 to 157.6 in August 2014.
- Affordability is up slightly from one month ago in all regions, the Northeast having the largest gain at 4.5%. The Northeast experienced a gain in affordability due to slower home price appreciation and favorable mortgage rates. From one year ago, affordability is down in all regions except the North east which had a 5% increase. The Midwest saw the biggest decline in affordability at 2.1 % while the South and the West had minor declines.
- Improvement in wage growth will be good for a change in affordability. As rents continue to rise, there is still hope that the lending restrictions loosen to make purchasing a home more attainable. A recent drop in mortgage applications should reduce the amount of bidders and competition for available inventory. Jobs are moving back to healthy stages as unemployment levels reach a low since 2008.
- 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.
Housing Affordability for August
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