Q4 Housing Affordability at 10-Year Low

Feb 14, 2019

Housing affordability held steady in the fourth quarter at its 10-year low, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI).

The new data determined that 56.6 percent of new and existing homes sold in the fourth quarter were affordable to families earning the median income of $71,900, only a tiny fraction above the 56.4 percent from the third quarter. Between the quarters, the national median home price moved fell slightly from $268,000 to $263,000 while mortgage rates increased from 4.72 percent to 4.89 percent, the highest rate level increase in seven years.

The Youngstown-Warren-Boardman corridor straddling Ohio and Pennsylvania was cited as the nation’s most affordable major housing market, with 92.7 percent of all new and existing homes sold in the fourth quarter being affordable to families earning the area’s median income of $60,100. Meanwhile, San Francisco, for the fifth straight quarter, was the nation’s least affordable major market, with only 6 percent of the homes sold in the fourth quarter of 2018 being affordable to families earning the area’s median income of $116,400.

“While solid job growth and rising household formations are fueling a demand for housing, home price appreciation has outpaced wage gains, putting a damper on housing affordability,” said NAHB Chief Economist Robert Dietz. “To keep housing moving forward, policymakers at all levels of government should make it a priority to address affordability concerns that are hurting home buyers and home builders alike.”

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Phil Hall

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Feb 14, 2019

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