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The Week Ahead: Will Affordability Improve?

The National Association of Realtors (NAR) will release its Housing Affordability Index on Friday. 

Its prior report [1] found that housing affordability improved in January 2020 compared to last year to December, according to NAR’s Housing Affordability Index. Median home prices rose 6.9 % in January from one year ago. The effective 30-year fixed mortgage rate dropped to 3.68% this January from 3.78% in December, mortgage rates are historically low compared to the year-ago level of 4.76%.

The NAR stated that affordability was up in three of the four regions and is only down in the Northeast 1.1% down from the prior month. The South had the largest gain of 6.1% followed by the West with an increase of 5.3%. The Midwest had the smallest incline of 4.5%.

Nationally, mortgage rates were down 108 basis points from one year ago (one percentage point equals 100 basis points). The median sales price for a single-family home sold in January in the US was $268,600 up 6.9% from a year ago, while median family incomes rose 2.7 % in 2020 from one year ago.

CoreLogic’s latest Case-Shiller Index [2]found home prices recorded their largest annual increases since December 2018 and a month-over-month increase of 0.85%—the fastest pace in 10 months. 

The report found annual home prices in March 2020 reached 4.35%. 

Also, the Census Housing Vacancy and Homeownership Survey shows homeownership continued to climb during Q1 2020, and at 65.3%—the highest level in seven years. The increase, according to CoreLogic, was driven by the jump in homeownership among those 29-year-old and younger. 

Also ahead on The Week Ahead are more exclusive interviews on DS5: Inside the Industry. Featured this week are conversations with Odeta Kushi, Deputy Chief Economist, First American Financial; Jeremy Serfling, Sr. Director, Product Management/Mortgage Lead, Equifax; and Daren Blomquist, VP, Market Economics, Auction.com

 

Here's what else is happening in The Week Ahead:

U.S. Senate Banking Committee Hearing on Housing Regulators (Tuesday) 

FOMC Meeting (Tuesday)