Housing Affordability Declines in Second Quarter
Washington, DC, Aug. 15, 2014 -- Nationwide housing affordability dipped in the second quarter as several markets saw a firming of home prices, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.
In all, 62.6% of new and existing homes sold in the quarter were affordable to families earning the U.S. median income of $63,900. This is down from the 65.5% of homes sold that were affordable to median-income earners in the first quarter.
The national median home price increased from $195,000 in the first quarter to $214,000 in the second quarter. Meanwhile, average mortgage interest rates decreased from 4.57% to 4.44% in the same period.
“The second quarter HOI reflects the slow but steady march toward the historic levels of price appreciation and interest rates that result in affordability levels we experienced before the mid-2000s boom,” said NAHB Chief Economist David Crowe. “While we are seeing a slight decrease in affordability, it is still fairly high by historical standards.”