Higher Home Prices Push Affordability Down
Housing affordability is down from a year ago as higher prices continue to outpace incomes, according to the National Association of REALTORS® Economists' Outlook blog.
Read more: Housing Affordability Hits 2 Extremes
Nationally, the median single-family home price is $221,000, up 10 percent from April 2014, NAR reports. The Midwest has seen some of the largest increases in home prices – climbing 11.6 percent in the past year alone. The Northeast, on the other hand, is seeing the slowest price growth regionally at 4.9 percent in the past year.
Housing affordability is down in all major regions of the U.S. from a year ago, except in the Northeast, where home price growth is moderating.
"In other regions, the decline from a year ago was relatively small as mortgage rates lower than a year ago helped but could not completely offset increases in home prices," NAR finds.
But mortgage rates are on their way up. Freddie Mac reported last week that the 30-year fixed-rate mortgage set a new high for 2015, averaging above 4 percent for the first time in nearly a year.
"This may be a good time for return and first-time home buyers to surge back into the housing market before rates climb higher, further reducing affordability," NAR notes.
View NAR's latest Housing Affordability Index for a full breakdown of affordability across the U.S.
Source: "Housing Affordability Index," National Association of REALTORS® Economists' Outlook Blog (June 12, 2015)