Index of U.S. Home Affordability Drops

From Bloomberg News

U.S. housing affordability fell in the third quarter because of higher home prices and mortgage rates, the National Assn. of Realtors said.

The housing affordability index fell to 136.6, the lowest in a year, from 143.8 in the second quarter, the Washington-based group said. A reading of 100 means a family with the national median income earns exactly enough to pay for a median-priced home. A higher reading indicates homes are more affordable.

The erosion in affordability came as the median U.S. home price rose at the fastest pace since 1980 and mortgage rates climbed from a 45-year low seen in June, said Lawrence Yun, an association economist.