Another Dip in Home Affordability, But...
Housing affordability nationwide creeped lower once again, as home prices continue to outpace incomes, according to the National Association of REALTORS®' Monthly Housing Affordability Index. Nevertheless, price gains are slowing and mortgage rates are hovering near yearly lows, which is helping to keep homes more affordable to the average family.
A Growing Problem
The median single-family home price in July was $223,900, rising 5.1 percent year-over-year.
Affordability in July fell from the previous month in all regions, excluding the Midwest. NAR researchers note that the Midwest was the only region to experience a slight gain in affordability because of lower home prices and qualifying incomes.
However, affordability has fallen from year-ago levels in all regions, with the West seeing the largest decline — 4.6 percent.
"The rise in mortgage rates was modest this month, so purchases at this time are still favorable when you compare the locked-in monthly payment of a mortgage to the rise in rents," according to NAR's affordability analysis. "New-home construction and an increase in inventory during a time of low rates could lead to more manageable price growth and more sales."
Source: “The Latest Housing Affordability Index Data,” National Association of REALTORS® Economists’ Outlook Blog (Sept. 15, 2014)