- Housing affordability is down for the month of May as the median price for a single family home in the US increased. The median single-family home price is $213,600, up 4.9 % from a year ago. Price gains are continuing to slow down.
- Mortgage rates are up 77 basis points (one percentage point equals 100 basis points) from last year. Nationally, affordability is down from 179.3 in May 2013 to 159.3 in May 2014.
- While jobs and income levels are up slightly from last year, they are not growing fast enough to offset price increases. Having money for a down payment can still be a big hurdle for potential home buyers who already pay comparable rent payments.
- Affordability is down slightly from one month ago in all regions. The South had the biggest drop in affordability. From one year ago, affordability is down in all regions. The West saw the biggest decline in affordability as a result of having the largest price gain at 8.4 %.
- With rents at a five year high and housing completions low, potential home buyers have good incentives to try to become a home owner.
- The Housing Affordability Index calculation assumes a 20 percent down payment and a 25 percent qualifying ratio (principle and interest payment to income).
If you are in the Los Angeles area, have any questions or real estate sales or financing needs, feel free in contacting me.
Ron Henderson GRI, RECS, CIAS
Multi Real Estate Services, Inc.
Gov’t Affairs Chair – California Association of Mortgage Professionals
Real Estate market, mortgage rates, Los Angeles, San Fernando Valley, Conejop Valley, Simi Valley, Woodland Hills, West Hills, Calabasas, Chatsworth