Housing Affordability Dips but Remains Strong

Washington, DC, Nov. 14, 2014 -- Firming home prices in markets across the country contributed to a slight dip in nationwide housing affordability in the third quarter, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.

In all, 61.8% of new and existing homes sold between the beginning of July and the end of September were affordable to families earning the U.S. median income of $63,900. This is down from the 62.6% of homes sold that were affordable to median-income earners in the second quarter, NAHB said.

The national median home price increased from $214,000 in the second quarter to $221,000 in the third quarter. Meanwhile, average mortgage interest rates decreased from 4.44% to 4.35% in the same period.

“Low mortgage rates, strong job growth and affordable home prices make this a good time to buy a home,” said NAHB Chairman Kevin Kelly.

“Even with nationwide home prices reaching their highest level since the end of 2007, affordability still remains fairly high by historical standards,” said NAHB Chief Economist David Crowe.

“Rising employment and incomes, interest rates that remain near historically low levels, and pent-up demand should contribute to positive momentum heading into next year.”