Housing affordability hits the wall

First-home buyer housing affordability crashed in the final three months of 2009, as would-be purchases of homes confronted higher interest rates and surging prices.

The affordability index's slide accelerated 18.4 per cent in the December quarter, following a 3.3 per cent fall in the September quarter, according to the Housing Industry Association and Commonwealth Bank, which compiled the data.

The index dropped from 147.1 points in the September quarter, to 120.1 points in the December quarter. The median monthly mortgage payments in that time jumped to $2505 from $2087.

With interest rates expected to rise from their current 3.75 per cent level, surging demand from international…