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FairfaxReal EstateHousing affordability continues to tumble

Housing affordability continues to tumble

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Housing affordability has fallen to its lowest level since the National Association of Home Builders (NAHB) began tracking it on a consistent basis in 2012, as rising mortgage rates, ongoing building-material supply-chain disruptions, high inflation and elevated home prices pushed the housing market into a recession.

And with mortgage rates moving even higher in the fall, affordability conditions are expected to further deteriorate through the end of the year.

According to the NAHB/Wells Fargo Housing Opportunity Index (HOI), just 42.2 percent of new and existing homes sold between the beginning of July and end of September were affordable to families earning the U.S. median family income of $90,000. This marks the second consecutive quarterly record low for housing affordability.

“Rising mortgage rates, supply-chain bottlenecks and a lack of skilled construction workers continue to push housing costs higher,” said NAHB chairman Jerry Konter, a builder and developer from Savannah. “Entry-level buyers are particularly hurt, as more of them are getting priced out of the market.”


While the HOI shows that the national median home price fell to $380,000 in the third quarter, it is still the second-highest median price in the history of the series, after the $390,000 recorded in the previous quarter.

Meanwhile, average mortgage rates reached a series high of 5.72 percent in the third quarter, up from 5.33 percent a quarter earlier.

For the eighth straight quarter, Los Angeles-Long Beach-Glendale, Calif., remained the nation’s least affordable major housing market. There, just 3.7 percent of the homes sold during the third quarter were affordable to families earning the area’s median income of $91,100.

Lansing-East Lansing, Mich., was the nation’s most affordable major housing market, defined as a metro with a population of at least 500,000. There, 84.4 percent of all new and existing homes sold in the third quarter were affordable to families earning the area’s median income of $89,500.

Meanwhile, Cumberland, Md.-W.Va., was rated the nation’s most affordable small market, with 92.1 percent of homes sold in the third quarter being affordable to families earning the median income of $71,300.

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