Home Affordability Improves in Fourth Quarter

Washington, DC, Feb. 19, 2015 -- Slightly lower interest rates and home prices in markets across the country contributed to a slight increase in nationwide housing affordability in the fourth quarter, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.

In all, 62.8% of new and existing homes sold during the quarter were affordable to families earning the U.S. median income of $63,900. This is up from the 61.8% of homes sold that were affordable to median-income earners in the third quarter, NAHB said.

The national median home price declined from $220,800 in the third quarter to $215,000 in the fourth quarter. Meanwhile, average mortgage interest rates decreased from 4.35% to 4.29% in the same period.

“Affordable home prices, historically low mortgage rates and an improving job market will release pent-up demand and help keep the housing market moving forward in the year ahead,” said NAHB Chief Economist David Crowe.