June Housing Affordability Index

At the national level, housing affordability is down from a year ago and for the month of June as rates inch up and modest income growth still struggles to keep pace with the growth of home prices.

• Housing affordability is down from a year ago in June as the median price for a single family home in the US is up from a year ago. Regionally, the West had the biggest increase in price at 10.0% while the Northeast experienced the slowest price growth at 4.4%. The Midwest and the South both contributed solid price gains of 7.2%.
• The median single-family home price is $237,700 up 6.6% from June 2014. June’s mortgage rate is 3.99, down 24 basis points (one percentage point equals 100 basis points) from last year. Nationally, affordability is down from 155.2 in June 2014 to 153.1 in June 2015.
• Affordability is down from one month ago in all regions, and the Midwest had the largest drop of 4.8% while the West fell only 3.5%. From one year ago, affordability is down in all regions except the Northeast which had an increase of 1.1%. The West saw the biggest decline in affordability at 3.6% and the Midwest had the smallest decline of 0.7%.
• Despite month to month changes, the most affordable region is the Midwest where the index is 191.1. The index is 161.4 in the South, 150.7 in the Northeast, and 113.9 in the West.
• With rates on the rise potential home buyers may try to hasten their search and purchase process. Lending options with low down payments are now more widely available. Mortgage applications are currently up but demand may level off if prices and rates continue to increase. New home construction has favored the multifamily inventory stock while single family homes have been lagging in production. An increase in single family construction will help ease the inventory shortage issue and slow down price growth.
• 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.