Many Cape homeowners may be underwater & under-insured
At the national level, housing affordability is up slightly for the month but higher mortgage rates and home prices have pushed affordability lower from a year ago. What is affordability like in your market?
- Housing affordability is up for the month of October in the U.S. and all 4 regions as prices increased slightly from September. The median single-family home price is up 12.7 % from last year as October marks the eleventh consecutive month of double-digit year-over-year price gains for single-family homes.
- Nationally, affordability is down from 203.7 in October 2012 to 165.4 in October 2013.
- Mortgage rates are down from last month and up 25.8% from a year ago. Lower rates help affordability but an increase in inventory will help ease the pressure on home prices.
- By region, affordability is up from one month ago in all regions except the Northeast, where there was a 5.0% decrease in affordability. The Midwest had the biggest gain in affordability at 2.7%. From one year ago, affordability is down in all regions. The West has had the largest price gain at 16.7 % while the Northeast had the smallest at 7.4%.
- For a look at how the housing market might respond to higher rates, I recommend this Stress Test by Chief Economist Lawrence Yun.
- 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). See further details on the methodology and assumptions behind the calculation here.