Rising home prices in many U.S. markets have resulted in a drop in affordability
Rising home prices in many U.S. markets have resulted in a drop in affordability, according to new data from the National Association of Home Builders.
Overall, just 63.2% of homes – new and existing – sold between in the second quarter were affordable to families earning the median U.S. income of $65,800, according to the NAHB/Wells Fargo Home Opportunity Index. That’s down from 66.5% in the first quarter.
“Home price appreciation in many markets across the nation are a sign that the housing recovery continues to move forward,” said NAHB Chairman Tom Woods. “At the same time, the cost of building a home is rising due to higher costs for buildable lots and skilled labor.”
The national median home price rose to $230,000 in the second quarter, a $20,000 increase from the first quarter. Meanwhile, average mortgage rates crept down slightly, from 4.03% to 3.99%.
Although affordability is down, the situation is hardly critical, said NAHB chief economist David Crowe.
“Though affordability edged slightly lower in the second quarter, the HOI remains well above 50, where half the households can afford half the homes sold,” Crowe said. “Low mortgage rates, pent-up demand and continued job growth should contribute to a gradual, steady rise in housing throughout the year.”
The nation’s most affordable housing market was the Youngstown-Warren-Boardman, Ohio-Pa., metropolitan area, where 90.6% of all homes sold in the second quarter were affordable to families earning the area’s median income of $53,700.
San Francisco, meanwhile, marked its 11th consecutive quarter as the country’s least affordable housing market, with just 11% of homes sold in the second quarter affordable by families earning the area’s median income of $103,400.
Overall, just 63.2% of homes – new and existing – sold between in the second quarter were affordable to families earning the median U.S. income of $65,800, according to the NAHB/Wells Fargo Home Opportunity Index. That’s down from 66.5% in the first quarter.
“Home price appreciation in many markets across the nation are a sign that the housing recovery continues to move forward,” said NAHB Chairman Tom Woods. “At the same time, the cost of building a home is rising due to higher costs for buildable lots and skilled labor.”
The national median home price rose to $230,000 in the second quarter, a $20,000 increase from the first quarter. Meanwhile, average mortgage rates crept down slightly, from 4.03% to 3.99%.
Although affordability is down, the situation is hardly critical, said NAHB chief economist David Crowe.
“Though affordability edged slightly lower in the second quarter, the HOI remains well above 50, where half the households can afford half the homes sold,” Crowe said. “Low mortgage rates, pent-up demand and continued job growth should contribute to a gradual, steady rise in housing throughout the year.”
The nation’s most affordable housing market was the Youngstown-Warren-Boardman, Ohio-Pa., metropolitan area, where 90.6% of all homes sold in the second quarter were affordable to families earning the area’s median income of $53,700.
San Francisco, meanwhile, marked its 11th consecutive quarter as the country’s least affordable housing market, with just 11% of homes sold in the second quarter affordable by families earning the area’s median income of $103,400.
