Housing affordability in the US hit is lowest point for ten years in the second quarter of 2018 as house prices and interest rates increased.
The National Association of Home Builders / Wells Fargo Housing Opportunity Index released Thursday shows that families earning the national median income of $71,900 could afford 57.1% of new and existing homes in the quarter.
That was down from 61.6% in the first quarter of 2018 and the worst it’s been since mid-2008 as the housing crisis gathered pace.
Those wanting to buy in Q2 2018 faced the dual blow of rising home prices – to a median $265,000, up $13K from Q1 – and rising mortgage rates which were up from an average 4.34% to 4.67% quarter-over-quarter.
“Rising household formations, along with a strong economic expansion in the second quarter that has fueled job growth, will support housing demand in the second half of 2018,” said NAHB Chief Economist Robert Dietz. “However, growing trade war concerns and the expectation of higher mortgage rates are additional headwinds negatively affecting housing affordability.”
Where are homes most, least affordable in the US?
For affordability, buyers should head to Syracuse, NY where 89.1% of all new and existing homes sold in the second quarter were affordable to families earning the area’s median income of $74,100.
The nation’s most affordable smaller market was also located in the Empire State. In Elmira 97% of homes sold in the second quarter were affordable to families earning the median income of $71,000.
San Francisco, for the third straight quarter, was the nation’s least affordable major market; just 5.5% of the homes sold in the second quarter of 2018 were affordable to families earning the area’s median income of $119,600.
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