During the second quarter of this year, 63.2 percent of the new and existing homes sold were affordable to families earning the U.S. median income of $65,800, according to the National Association of Home Builders Housing Opportunity Index. And though that’s down from 66.5 percent in the first quarter, David Crowe, NAHB’s chief economist, says conditions are still favorable. “Though affordability edged slightly lower in the second quarter, the HOI remains well above 50, where half the households can afford half the homes sold,” Crowe said. “Low mortgage rates, pent-up demand and continued job growth should contribute to a gradual, steady rise in housing throughout the year.” The slight drop in affordability is largely due to the fact that home prices continue to rise. In fact, the national median home price increased from $210,000 in the first quarter to $230,000 in the second quarter. On the other hand, average mortgage rates actually moved lower during the same period, which should help offset some of the effects of continued price gains. More here.
