Featured News

Despite continued inventory woes, housing affordability increases in Q1

Increases in mortgage rates are being offset by rising incomes, providing a small boost to housing affordability in the first quarter of this year, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.

According to the Index, some 61.6 percent of new and existing homes sold in the first quarter were affordable to families earning the national median income of $71,900. That’s up from the 59.6 percent of homes that were considered to be affordable in the last quarter of 2017.

The reason is that median family incomes have risen by 5.7 percent during the last quarter, up from $68,000 in Q4 2017.

“This wage growth helped to boost housing affordability,” said Robert Dietz, chief economist of the NAHB. “A growing economy, along with tight inventories and increasing household formations, will lift housing production in the year ahead. But we expect mortgage rates to continue to rise, and this will place downward pressure on affordability.”

The average mortgage rate has grown by almost 30 basis points in Q1 of this year. Rates averaged 4.34 percent, up from 4.06 percent in the previous quarter.

Of the 237 U.S. metro areas that were analyzed, 167 saw housing affordability increase compared to the previous quarter. Sixty-eight metros saw affordability decrease, while two remained unchanged.

The Youngstown-Warren-Boardman, Ohio-Pa. metro area remains the most affordable for housing, with 90.9 percent of all new and existing homes sold during Q1 being affordable to families earning the national median income. The top five most affordable markets is rounded out by Indianapolis-Carmel-Anderson, Ind.; Scranton-Wilkes Barre-Hazleton, Pa.; Toledo, Ohio; and Harrisburg-Carlisle, Pa.

As for the smaller markets, the most affordable during the last quarter was Cumberland, Md.-W.Va., where a whopping 98.5 percent of all homes sold were deemed to be affordable.

Not surprisingly, San Francisco’s red hot real estate market remains the least affordable, with just 9.2 percent of homes sold there rated as being “affordable”. California is home to most of the country’s least affordable markets, with cities including Los Angeles-Long Beach-Glendale; Anaheim-Santa Ana-Irvine; San Jose-Sunnyvale-Santa Clara; and San Diego-Carlsbad trailing just behind San Francisco.

Mike Wheatley

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at mike@realtybiznews.com.

Recent Posts

Creating Floor Plans in Minutes with CubiCasa’s Real Estate Technology Solutions

Crafting the perfect real estate lifting is as much an art as it is a…

46 mins ago

What Are Easements in Appurtenant?

If you have a large parcel of land and you want to release some of…

2 hours ago

Sam Mizrahi: A Great City Needs a Dynamic, Graceful and Inspiring Center

As an admirer of architecture, Canadian developer Sam Mizrahi knows that the great cities of…

3 days ago

8 Risk Factors to Consider Before Investing in Real Estate

It is said that with great risk comes great reward. All sorts of investments come…

3 days ago

First National Realty Partners: Invest or Avoid?

Accredited investors have many different options to choose from once they decide to invest in…

3 days ago

Google AdSense - How to Use It on Your Real Estate Blog

Your real estate blog is one of the greatest marketing tools you have at your…

4 days ago