Economists' Outlook

Housing stats and analysis from NAR's research experts.

May 2019 Housing Affordability Index

At the national level, housing affordability is down from last month, but up from a year ago. Mortgage rates were down from last month at 4.11% this May, and down 7.7% compared to 4.71% a year ago.

Housing Affordability Index chart: May Housing Affordability
  • Housing affordability increased from a year ago in May, moving the index up 5.6% from 142.4 to 150.4. The median sales price for a single family home sold in May in the US was $280,200, up 4.6% from a year ago.
  • Nationally, mortgage rates were down 60 basis points from one year ago (one percentage point equals 100 basis points).
  • Payment as a percentage of income was up slightly from last month, at 16.6% this May and 17.6% from a year ago. Regionally, the West has the highest payment at 22.9% of income. The South had the second highest payment at 16.1% followed by the Northeast at 15.9%. The Midwest had the lowest payment as a percentage of income at 13.4%.
Housing Affordability Index chart: Payment as a percentage of income
  • Regionally, the Northeast recorded the biggest increase in home prices at 6.7%. The Midwest had an increase of 5.5% while the West had a gain of 4.1%. The South had the smallest increase in price of 4.1%.
  • All four regions saw an increase in affordability from a year ago. The South had the biggest gain in affordability of 6.9%, followed by the West with a gain of 6.0%. The Midwest had an increase of 5.8%, followed by the Northeast with the smallest gain of 1.8%.
  • On a monthly basis, affordability is up from last month in only the South region which had a gain of 0.4%. The Northeast had the biggest dip of 4.0% followed by the West with a drop of 2.3%. The Midwest region had the smallest decline of 0.9%.
  • Despite month-to-month changes, the most affordable region was the Midwest, with an index value of 186.7. The least affordable region remained the West, where the index was 109.3. For comparison, the index was 155.1 in the South, and 156.8 in the Northeast.
Housing Affordability Index chart: U.S. & Regional Incomes
  • Mortgage applications recently decreased 2.4% New home purchase applications are up 17.9 year over year. Credit availability is currently up. Home prices are rising faster than previous months. Median family incomes are growing at 2.9 percent, while home prices increased 4.6%. Even with gains in inventory, there is still a housing shortage and there are not enough homes at the lower price points. The shortage is putting pressure on renters who are feeling the burden of rising rents. Housing starts are low so there needs to be more increase to meet the housing demand. Interest rates are still favorably low for consumers and job creation is steady.
  • What does housing affordability look like in your market? View the full data release.
  • The Housing Affordability Index calculation assumes a 20% down payment and a 25% qualifying ratio (principal and interest payment to income). See further details on the methodology and assumptions behind the calculation.

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