Share of "Affordable" Homes Falls to 10-Year Low

Housing
affordability crept down again in the third quarter of 2018 reaching, according
to the National Association of Home Builders (NAHB), a ten-year low.  The NAHB/Wells Fargo Housing Opportunity
Index (HOI) indicates that 56.4 percent of new and existing homes that were
sold nationwide during the quarter were affordable to families earning the U.S.
median income of $71,000.  In the second
quarter 57.1 percent of homes were affordable by this measure.  Affordability, according to the 2nd
quarter reading, is the lowest since mid-2008.

 

 

The HOI reacted to the combination of a 5
basis point increase in the mortgage interest rate to 4.72 percent over the
course of the reporting period, coupled ongoing appreciation in home values.
The median price of a home sold during the quarter was $268,000, $3,000 more
than the median in the second quarter.

The most affordable major housing market
in the country was Syracuse with 88.2 percent of all homes sold available to
families earning the area’s median income of $74,100. It was the second quarter
in a row that Syracuse topped the affordability chart.  The most affordable small market was Kokomo,
Indiana where 93.2 percent of houses were affordable to families earning
$64,100.

San Francisco extended its reign as the least affordable major market to a
fourth quarter.  Only 6.4 percent of
homes sold were affordable to a median income family, even though that median
income was  $116,400.  All five least affordable small housing
markets were also in the Golden State led by Santa Cruz-Watsonville where 6.5
percent of homes were affordable to those earning the area’s median of $81,400.

Rose Quint, summarizing the HOI results in NAHB’s Eye on Housing blog said, “Overall, housing demand continues to be
supported by strong job and economic growth, but affordability is being
challenged by price and interest rate increases as well as labor shortages and
trade war concerns.”

Article source: http://www.mortgagenewsdaily.com/11082018_housing_affordability.asp

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