January 2019 Housing Affordability Index

Bobby and Lindsey
Published on March 12, 2019

January 2019 Housing Affordability Index

At the national level, housing affordability is up from last month but down from a year ago. Mortgage rates were up from last month at 4.76 percent this January, and up 11.5 percent compared to 4.27 percent a year ago.

  • Housing affordability declined from a year ago in January moving the index down 5.3 percent from 164.5 to 155.8. The median sales price for a single family home sold in January in the US was $249,400 up 3.1 percent from a year ago.
  • Nationally, mortgage rates were up 49 basis point from one year ago (one percentage point equals 100 basis points).
  • The payment as a percentage of income was down from last month at 16.1 percent this January and up from 15.2 percent from a year ago. Regionally, the West has the highest payment at 22.4 percent of income. The South had the second highest payment at 15.6 percent followed by the Northeast at 15.2 percent. The Midwest had the lowest payment as a percentage of income at 12.7 percent.

  • Regionally, the West recorded the biggest increase in home prices at 3.8 percent. The South had an increase of 3.0 percent while the Midwest had a modest gain of 0.9 percent. The Northeast had the smallest gain in price of 0.2 percent.
  • Regionally, all four regions saw a decline in affordability from a year ago. The Midwest had the biggest drop in affordability of 5.2 percent. The South had a decline of 4.7 percent followed by the West that fell 4.0 percent. The Northeast had the smallest drop of 3.4 percent.
  • On a monthly basis, affordability is up from last month in all of the four regions. The Northeast region had the biggest increase of 8.5 percent. The South had an incline of 7.5 percent followed by the West with a gain of 4.7 percent. The Midwest had the smallest increase in affordability of 3.0 percent.
  • Despite month-to-month changes, the most affordable region was the Midwest, with an index value of 196.9. The least affordable region remained the West where the index was 111.7. For comparison, the index was 160.3 in the South, and 164.5 in the Northeast.

  • Mortgage applications are currently down while credit availability is up. Median family incomes are growing 3.4 percent outpacing home prices of 3.1 percent. Affordability this January showed back-to-back gains. Interest rates are favorably low and with gains in inventory, potential homebuyers have more options and can take advantage of lower monthly payments.

  • 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.

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