Housing affordability hit a low point at the end of last year, according to the National Association of Home Builders’ Housing Opportunity Index. The index – which measures whether new and existing homes are affordable to families earning the U.S. median income – found that just 38.1 percent of homes sold during the fourth quarter of 2022 could be considered affordable. It was the lowest reading since the NAHB began tracking affordability. Fortunately, though, the newly released first-quarter results of the HOI show housing affordability has since rebounded from that low point. In fact, first-quarter data shows 45.6 percent of homes sold between January and March were affordable. That’s a significant improvement. But while quarter-over-quarter results were encouraging, Robert Dietz, NAHB’s chief economist, says affordability still trails year-before levels. “Elevated interest rates and higher home prices coming out of the pandemic have left housing affordability conditions considerably lower on a year-over-year basis,” Dietz said. “While affordability posted a gain in the first quarter, it is still well below the breakeven point of 50.” (source)
