NAHB: Home affordability drops slightly
The rapid rise in home values in much of the country in 2014 has led to a decline in the house affordability index compiled by the NAHB and Wells Fargo.
An estimated 62.6 percent of new and existing houses sold between April and July were considered within reach of families earning the U.S. median annual wage of $63,900. That’s a slight decline from the 65.5 percent of houses that could have been purchased by the same families in the first quarter of the year.
"With interest rates near historically low levels and strengthening job growth, now continues to be a great opportunity to buy a home," said National Association of Home Builders Chairman Kevin Kelly, a home builder and developer from Wilmington, Del.
The U.S. median home price increased from $195,000 to $214,000 in the first six months of the year.
"The second-quarter HOI (Housing Opportunity Index) reflects the slow but steady march toward the historic levels of price appreciation and interest rates that result in affordability levels we experienced before the mid-2000s boom," said NAHB chief economist David Crowe. "While we are seeing a slight decrease in affordability, it is still fairly high by historical standards."