The Latest Housing Affordability Index…. the national level, housing affordability is down for the month of June due to higher prices and qualifying income levels despite the lowest mortgage rates of the year.
Housing affordability is down for the month of June as the median price for a single family home in the US rose again. The median single-family home price is $224,300 up 4.5 % from June 2013 as year over year price gains are continuing to slow down.
Mortgage rates are up 56 basis points (one percentage point equals 100 basis points) from last year, nationally, affordability is down from 168.5 in June 2013 to 153.4 in June 2014.
Changes in the credit approval process may increase the number of potential home buyers improving their chances at finding a loan. New homes will help inventory which in turn will tame price growth, making it a good time to enter the market for those considering purchasing a home.
Affordability is down slightly from one month ago in all regions. The Midwest had the biggest drop in affordability. From one year ago, affordability is down in all regions. The West saw the biggest decline in affordability at 10.5 %.
Homeowners are still able to take advantage of programs that allow them to refinance and lock in a low mortgage rate with price growth providing equity. Locking in a lower rate now will save money paid in interest for the long term.
What does housing affordability look like in your market? The Housing Affordability Index calculation assumes a 20 percent down payment and a 25 percent qualifying ratio (principle and interest payment to income).