Housing Affordability is on the Rise

Housing Affordability is on the Rise

Posted 03/03/2016

Northlands Maracay Homes

If you’re in the market to purchase a new home any time soon, take heart. The latest National Association of Home Builders/Wells Fargo Housing Opportunity Index indicates housing affordability is improving.

The national median home price fell to $226,000 in the fourth quarter, down from $231,000 in the third quarter last year, according to the NAHB. Meanwhile, average mortgage rates also edged lower, to 4.09 percent from 4.18 percent in the same period.

NAHB Chairman Ed Brady, a homebuilder and developer from Bloomington, Ill., said the improvement in affordability bodes well for continued recovery in the housing market this year. “Affordable home prices, attractive mortgage rates and pent-up demand are keeping the housing market on a gradual, upward path,” he said.

In all, 63.3 percent of new and existing homes sold between October and December were affordable to families earning the U.S. median income of $65,800 – up from 62.2 percent in the third quarter, according to the quarterly index, which measures the percentage of homes sold in a given area that are affordable to families earning the area’s median income.

Youngstown-Warren-Boardman, Ohio-Pa., topped the list of the nation’s most affordable major housing markets, while San Francisco-San Mateo-Redwood City, Calif., was the nation’s least affordable major market for the 13th consecutive quarter.

NAHB Chief Economist David Crowe agreed, noting that steady employment and economic growth, coupled with rising consumer confidence and pent-up demand, are driving buyers into the marketplace. “The signs point to continuing growth in home sales,” he said.