As home prices spike and interest rates stay elevated, affordability has fallen to its lowest point in more than three decades.
First American Financial’s Real House Price Index soared by 16.9% YOY in July, the latest available data, and was up 2% from the month prior.
But consumer buying power sank, down 1% month-over-month and 11% YOY.
The RHPI is controlled for house-buying power, measuring the impact of income and interest rate changes, and therefore acts as a measure of housing affordability as well as price changes.
The increase was driven by house prices and the 30-year fixed-rate mortgage rate rising 4% and 1.4% YOY, respectively.
The median existing-home sale price was $345,000, while the median house-buying power was just…
First American Financial’s Real House Price Index increased by 30.6% YOY in February, its fastest growth in the more than 30-year history of the series, the company reported. The RHPI measures the price changes of single-family properties throughout the U.S. adjusted for the impact of income and interest rate changes on consumer house-buying power over time at national, state, and metropolitan area levels. Because the RHPI adjusts for house-buying power, it also serves as a measure of housing affordability. February’s numbers show a rapid month-over-month decline in affordability. Real house prices rose by 5.6% from January, and nearly 31% YOY. Consumer house-buying power fell 3.6% between January and February, and 6.8% YOY. First American attributes the numbers to rising home…
Homes are less affordable than they were a year ago, but they largely remain more affordable than at the peak of the 2006 housing boom, according to First American Financial Corporation’s Real House Price Index. In January, the RHPI rose 27% from the year prior, making it the fastest-growing RHPI – and fastest YOY decline in affordability – since 2004. This was driven by a 21.7% increase in home prices and a 0.7% rise in rates. The RHPI measures price changes for single-family properties adjusted for the impact of income and interest rate changes on consumer house-buying power. As such, it also serves as a measure of affordability. Household income was up 5% from January 2021, but that gain was…
Homebuyers in June 2021 had 129 percent more house-buying power than in 2006, according to the June 2021 First American Real House Price Index (RHPI), released today. “House-buying power, how much one can buy based on changes in income and interest rates, increased by 6.8 percent in June compared with a year ago, propelled by lower mortgage rates and higher household income,” said Mark Fleming, chief economist at First American Financial Corporation, which releases the RHPI. First American is a leading global provider of title insurance, settlement services, and risk solutions for real estate transactions. “The affordability gain from increased house-buying power, however, was offset by the third component of the RHPI, nominal house price appreciation, which reached a record…
