NAHB: Nearly 130,000 Households Blocked With Each $1,000 Price Increase
January 9, 2019
Each $1,000 increase in the cost of a median-priced newly-built home will result in 127,560 prospective buyers being pushed out of the market, according to a new study from the National Association of Home Builders (NAHB).
In its data analysis, the NAHB determined that a quarter-point rise in the rate for a 30-year fixed-rate mortgage would price out around 1 million households. Among all the states, Texas had the largest number of homebuyers that would be priced of the market: a $1,000 price increase would force 11,152 households out of the state’s housing market, with California (9,897) and Ohio (7,341) also facing similar problems. The Greater Chicago area was the largest metropolitan market cited by the NAHB, with 4,499 households being blocked if the price increases by $1,000.
“This study illustrates how even a relatively small increase in price or interest rates can dramatically impact housing affordability,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “Housing affordability is a serious problem right now in communities across the country. Rising interest rates, regulatory barriers, higher building materials costs and labor shortages all add to the cost of a home, and are preventing households from achieving the goal of homeownership.”
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