September 2016 Housing Affordability Index

At the national level, housing affordability is up from a year ago for the third consecutive month. Mortgage rates ticked up and stood at 3.78 this September and increases are expected to continue.

• Housing affordability increased from a year ago in September pushing the index up 1.0 percent from 165.9 to 167.5. The median sales price for a single family home sold in September in the US was $235,700 up 5.6 percent from a year ago.
• Nationally, mortgage rates were down 32 basis points from one year ago (one percentage point equals 100 basis points) while incomes modestly rose 2.5 percent.
• Regionally, the West had the biggest increase in price at 7.9 percent. The South had an increase of 6.8 percent while the Midwest had a 5.9 percent gain in price. The Northeast had the smallest increase of 1.3 percent.
• Regionally, two of the four regions saw increases in affordability from a year ago. The Northeast had the biggest increase of 5.2 percent. The Midwest had a modest increase of 0.1 percent. The South had a decline in affordability of 1.6 percent while the West had a decline of 0.2 percent.
• By region, affordability is up in all regions from last month. The Northeast had the biggest increase of 4.8 percent. The Midwest followed with a gain of (3.2 percent) and the South had a gain of (2.3 percent). The West had the smallest increase in affordability of 0.8 percent.
• Despite month to month changes, the most affordable region is the Midwest where the index is 210.5. The least affordable region remains the West where the index is 120.0.  For comparison, the index is 170.6 in the South, 173.0 in the Northeast.
• Mortgage applications are currently down this week and rates remain historically low. There have been no meaningful gains in housing starts or completions which will not help future affordability.
• 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.