by Michael Dey | Dec 27, 2018 | Blog, Housing Economics
A modest increase in interest rates and home prices kept housing affordability at a 10-year low in the third quarter of 2018, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI) released last month.
In all, 56.4% of new and existing homes sold between the beginning of July and end of September were affordable to families earning the U.S. median income of $71,900. This is down from the 57.1% of homes sold in the second quarter that were affordable to median-income earners and the lowest reading since mid-2008.
The national median home price edged up from $265,000 in the second quarter of 2018 to $268,000 in the third quarter. This is the highest quarterly median price in the history of the HOI series. At the same time, average mortgage rates rose by a nominal 5 basis points in the third quarter to 4.72 percent from 4.67 percent in the second quarter.
“Continuing home price appreciation and rising interest rates coupled with persistent labor shortages are contributing to housing affordability concerns,” said NAHB Chairman Randy Noel. “Builders are increasingly focusing on managing home construction costs so that they do not outpace wage gains.”
“Ongoing job and economic growth provide a solid backdrop for housing demand amid recent declines in affordability,” said NAHB Chief Economist Robert Dietz. “However, housing affordability will need to stabilize to keep forward momentum from diminishing as we move into the new year.”
Greater Greenville
The index for Greater Greenville rose to 71.7 in the third quarter from 69.3 in the second quarter, but fell from 74.7 in the same quarter last year. House prices fell slightly while income remained the same. Greater Greenville ranks as the 96th most affordable housing market in the country.
The Rest of the Nation
For the second straight quarter, Syracuse, N.Y., remained as the nation’s most affordable major housing market. There, 88.2% of all new and existing homes sold in the third quarter were affordable to families earning the area’s median income of $74,100. Meanwhile, Kokomo, Ind. was rated the nation’s most affordable smaller market, with 93.2% of homes sold in the third quarter being affordable to families earning the median income of $64,100.
Rounding out the top five affordable major housing markets in respective order were Scranton-Wilkes Barre-Hazleton, Pa.; Indianapolis-Carmel-Anderson, Ind.; Youngstown-Warren-Boardman, Ohio-Pa.; and Harrisburg-Carlisle, Pa.
Smaller markets joining Kokomo at the top of the list included Elmira, N.Y.; Fairbanks, Alaska; Cumberland, Md.-W.Va.; and Springfield, Ohio.
San Francisco, for the fourth straight quarter, was the nation’s least affordable major market. There, just 6.4% of the homes sold in the third quarter of 2018 were affordable to families earning the area’s median income of $116,400.
Other major metros at the bottom of the affordability chart were located in California. In descending order, they included Los Angeles,-Long Beach-Glendale; Anaheim-Santa Ana-Irvine; San Jose-Sunnyvale-Santa Clara; and San Diego-Carlsbad.
All five least affordable small housing markets were also in the Golden State. At the very bottom of the affordability chart was Santa Cruz-Watsonville, where 6.5% of all new and existing homes sold were affordable to families earning the area’s median income of $81,400.
In descending order, other small markets at the lowest end of the affordability scale included Salinas; Napa; San Luis Obispo-Paso Robles-Arroyo Grande; and San Rafael.
by Michael Dey | May 11, 2018 | Uncategorized
Strong wage growth more than offset an increase in mortgage interest rates to boost nationwide housing affordability in the first quarter of 2018, according to the NAHB Housing Opportunity Index (HOI).
In all, 61.6% of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $71,900. This is up from the 59.6% in the fourth quarter of 2017.
In Greater Greenville, a slight drop in housing prices coupled with a $4,400 increase in annual wages resulted in an improvement to the index from 70.6% to 75.7% during the first quarter. House prices dropped from $202,000 to $194,000 as builders responded to demand from millennials for housing that they can afford. Greenville is the 107th most affordable housing market in the country, down from 98th last quarter as other markets even better improvements.
Charleston’s affordability also improved as wages rose by nearly 10 percent. Charlotte also improved, along with Atlanta. Columbia’s affordability fell slightly to 82.5%. Columbia is among the 50 most affordable housing markets in the country and 10th in the Southeast.
“Continued job growth, rising wages and strong consumer confidence are fueling housing demand. In turn, this should lead to more buyers entering the housing market in the coming months,” said NAHB chairman Randy Noel. “However, builders continue to face chronic labor and lot shortages, rising prices for building materials and excessive regulations.”
“At the national level, median family income rose an impressive 5.7% to $71,900 in 2018 from $68,000 last year, and this wage growth helped to boost housing affordability,” said NAHB chief economist Robert Dietz. “A growing economy, along with tight inventories and increasing household formations, will lift housing production in the year ahead. But we also expect mortgage rates to continue to rise, and this will place downward pressure on affordability.”
Average mortgage rates jumped by nearly 30 basis points to 4.34% from 4.06% in the fourth quarter of 2017.
Of the 237 metropolitan areas recorded in the first quarter HOI, 167 markets registered a gain in affordability from the fourth quarter of 2017, 68 posted a loss and two were unchanged.
See nahb.org/hoi for tables, historic data and details.
by Michael Dey | Aug 13, 2015 | Uncategorized
Firming home prices in many housing markets resulted in a modest drop in nationwide housing affordability in the second quarter of 2015, according to the latest NAHB/Wells Fargo Housing Opportunity Index (HOI).
“Home price appreciation in many markets across the nation are a sign that the housing recovery continues to move forward,” said NAHB Chairman Tom Woods. “At the same time, the cost of building a home is rising due to higher costs for buildable lots and skilled labor.”
In Greater Greenville, even as housing prices have risen, the index improved from 77.7% during the first quarter 80% in the second quarter. Like the nation, house prices increased to $158,000 from $154,000. Income remained the same at $58,000. Greater Greenville’s national rank as most affordable among all housing markets improved to 76th nationally from 107th in the last quarter. Greenville is now 17th in the Southeast, an improvement from 32nd in the first quarter.
Meanwhile, Charleston’s affordability declined as housing prices continued to rise. Charlotte’s affordability also also declined, along with Atlanta. Columbia’s affordability improved slightly to 88.7%. Columbia is among the 50 most affordable housing markets in the country and 10th in the Southeast.
In all, 63.2% of homes sold nationwide between the beginning of April and end of June were affordable to families earning the median income of $65,800. This is down from the 66.5% of homes sold that were affordable to median-income earners in the first quarter.
The national median home price increased from $210,000 in the first quarter to $230,000 in the second quarter as average mortgage rates edged slightly lower from 4.03% to 3.99% in the same period.
“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,” said NAHB Chief Economist David Crowe. “Low mortgage rates, pent-up demand and continued job growth should contribute to a gradual, steady rise in housing throughout the year.”
Youngstown-Warren-Boardman, Ohio-Pa. was rated the nation’s most affordable major housing market, and Kokomo, Ind., claimed the title of most affordable small housing market in this year’s second quarter. There, 95.5% of homes sold were affordable to families earning the area’s median income of $55,200.
For the 11th consecutive quarter, San Francisco-San Mateo-Redwood City, Calif., was the nation’s least affordable major housing market. There, only 11% of homes sold in the second quarter were affordable to families earning the area’s median income of $103,400.
Please visit nahb.org/hoi for tables, historic data and details.
by Michael Dey | May 20, 2015 | Uncategorized
Lower interest rates and home prices contributed to a solid boost in nationwide affordability in the first quarter of 2015, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI) released today.
“Consumers benefited from continued low mortgage rates and some fall in the price of homes sold in the first quarter, as these conditions offer a great time to buy,” said NAHB Chairman Tom Woods.
In Greater Greenville, the index fell from 80.4% during the fourth quarter of 2014 to 77.7% in the first quarter of 2015. Like the nation, house prices dropped to $154,000 from $161,000, and income also fell slightly to $58,000. As a result, Greater Greenville’s national rank as most affordable among all housing markets fell from 64th in the fourth quarter to 107th last quarter. Greenville is now 32nd in the Southeast, off from 13th in the fourth quarter.
Meanwhile, Charleston’s affordability continued to improve as income rises in that market. Charlotte’s affordability also improved, again the result of rising wages. Atlanta’s affordability also improved on rising wages.
“The past two quarters have seen an improvement in affordability as mortgage rates remain low,” said NAHB Chief Economist David Crowe. “Eighty-five percent of the metropolitan areas measured experienced an increase in affordability. Along with favorable home prices and pent-up demand, this broad improvement should help encourage more buyers to enter the marketplace.”
In all, 66.5% of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $65,800. This is up from the 62.8% of homes sold that were affordable to median-income earners in the fourth quarter.
The national median home price declined from $215,000 in the fourth quarter to $210,000 in the first quarter. Meanwhile, average mortgage interest fell from 4.29% to 4.03% in the same period.
For the second straight quarter, Syracuse, N.Y. remained the nation’s most affordable major housing market, as 95.6% of all new and existing homes sold in the first quarter of 2015 were affordable to families earning the area’s median income of $68,500.
Also ranking among the most affordable major housing markets in respective order were Toledo, Ohio; St. Louis; Akron, Ohio; and Harrisburg-Carlisle, Pa.
Meanwhile, Sandusky, Ohio topped the affordability chart among smaller markets in the first quarter of 2015. There, 96.3% of homes sold during the first quarter were affordable to families earning the area’s median income of $69,600. Other smaller housing markets at the top of the index included Cumberland, Md.-W.Va.; Elmira, N.Y.; Davenport-Moline-Rock Island, Iowa-Ill.; and Kokomo, Ind.
For a 10th consecutive quarter, San Francisco-San Mateo-Redwood City, Calif. was the nation’s least affordable major housing market. There, just 14.1% of homes sold in the first quarter were affordable to families earning the area’s median income of $103,400.
Other major metros at the bottom of the affordability chart were Los Angeles-Long Beach-Glendale, Calif.; Santa Ana-Anaheim-Irvine, Calif.; New York-White Plains-Wayne, N.Y.-N.J.; and San Jose-Sunnyvale-Santa Clara, Calif.
All five least affordable small housing markets were in California. At the very bottom was Santa Cruz-Watsonville, where 21.6% of all new and existing homes sold were affordable to families earning the area’s median income of $87,000. Other small markets included Salinas, Napa, San Luis Obispo-Paso Robles, and Santa Barbara-Santa Maria-Goleta; in descending order.
Please visit nahb.org/hoi for tables, historic data and a complete listing of markets sorted alphabetically or ranked by affordability.
by Michael Dey | Feb 19, 2015 | Uncategorized
Slightly lower interest rates and home prices contributed to a slight increase in nationwide housing affordability in the fourth quarter of 2014, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI) released today.
In all, 62.8% of new and existing homes sold between the beginning of October and end of December were affordable to families earning the median income of $63,900. This is up from the 61.8% of homes sold in the third quarter.
The national median home price declined from $220,800 in the third quarter to $215,000 in the fourth quarter. Meanwhile, average mortgage interest rates decreased from 4.35% to 4.29%.
In Greater Greenville, the index rose from 78% during the third quarter of 2014 to 80.4% in the fourth quarter. Like the nation, house prices dropped slightly to $161,000 from $163,000, while income remained at $58,200. As a result, Greater Greenville’s national rank as most affordable among all housing markets improved to 64th nationally, and 13th in the Southeast.
Meanwhile, Charleston’s affordability fell slightly as housing prices continued to rise in that market. But Charlotte’s affordability improved, also the result of falling home prices. Atlanta’s affordability also improved.
“This upturn in affordability is a positive development, and in line with what we are hearing from builders in the field: More prospective buyers are starting to move forward in the marketplace,” said Tom Woods, Chairman of the National Association of Home Builders (NAHB).
“Affordable home prices, historically low mortgage rates and an improving job market will release pent-up demand and help keep the housing market moving forward in the year ahead,” said NAHB Chief Economist David Crowe.
Syracuse, N.Y. claimed the title of the nation’s most affordable major housing market, as 92.8% of all homes sold in the fourth quarter of 2014 were affordable to families earning the area’s median income of $67,700.
Also ranking among the most affordable major housing markets: Akron and Dayton, Ohio and Harrisburg-Carlisle and Scranton-Wilkes-Barre, Pa, with the latter two tied for fourth place.
Cumberland, Md.-W.Va. topped the affordability chart among smaller markets: 96.2 percent of homes sold during the fourth quarter were affordable to families earning the area’s median income of $54,100. Other smaller housing markets at the top of the index include Kokomo, Ind.; Wheeling, W.Va.-Ohio; Binghamton, N.Y.; and Salisbury, Md.
For a ninth consecutive quarter, San Francisco-San Mateo-Redwood City, Calif. was the nation’s least affordable major housing market. There, just 11.1% of homes sold were affordable to families earning the area’s median income of $100,400.
Other major metros at the bottom of the affordability chart were Los Angeles-Long Beach-Glendale, Santa Ana-Anaheim-Irvine, and San Jose-Sunnyvale-Santa Clara — all in California — and New York-White Plains-Wayne, N.Y.
All five least affordable small housing markets were in California. At the very bottom was Napa, where 12% of homes sold were affordable to families earning the area’s median income of $70,300. Other markets on the list included Santa Cruz-Watsonville, Salinas, Santa Rosa-Petaluma, and San Luis Obispo-Paso Robles; in descending order.
