December 2017 Housing Affordability Index
At the national level, housing affordability is practically flat from last month and down from a year ago. Mortgage rates increased to 4.22 percent this December, up 1.7 percent compared to 4.15 percent a year ago.
- Housing affordability declined from a year ago in December moving the index down 2.3 percent from 163.8 to 160.1. The median sales price for a single family home sold in December in the US was $247,900 up 5.7 percent from a year ago.
- Nationally, mortgage rates were up seven basis points from one year ago (one percentage point equals 100 basis points) while median family incomes rose 4.1 percent.
- Regionally, the West recorded the biggest increase in price at 8.6 percent. The Midwest had an increase of 7.5 percent while the Northeast had a gain of 6.7 percent. The South had the smallest incline in price of 5.8 percent.
- Regionally, all four regions saw a decline in affordability from a year ago. The Midwest had the biggest decline of 4.4 percent. The West followed with a decline of 4.0 percent. The South had a decline of 1.0 while the Northeast had the smallest decline of 0.8 percent.
- On a monthly basis, affordability is down from last month in two of the four regions. The Northeast had the biggest gain of 3.5 percent followed by the Midwest with a gain of 1.3 percent. The West had a decline of 0.1 percent. The South had the biggest drop in affordability of 0.9 percent.
- Despite month-to-month changes, the most affordable region was the Midwest, with an index value of 203.1. The least affordable region remained the West where the index was 111.5. For comparison, the index was 161.7 in the South, and 177.5 in the Northeast.
- Mortgage applications are currently up 0.7 percent. There are plenty of potential homebuyers interested entering in the housing market as rates continue to rise. There is job growth and incomes are rising but still not at the pace of home prices. New construction is on the rise however low inventory remains a concern due to the pressure it puts on home prices.
- 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.