Nationwide housing affordability slipped several notches as recovering markets witnessed significant firming of home prices in the second quarter, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI).
In all, 69.3 percent of new and existing homes sold between the beginning of April and end of June were affordable to families earning the U.S. median income of $64,400. This is down from the 73.7 percent of homes sold that were affordable to median-income earners in the first quarter, and the first time that the measure has fallen below 70 percent since late 2008.
Less than one-third of all families (30.7 percent) in the Seattle-Bellevue-Everett region can now afford the median priced home of $370,000, according to the survey. The area’s median income was listed as $81,400.
“Now that markets across the country are recovering, home values are strengthening at the same time that the cost of building homes is rising due to tightened supplies of building materials, developable lots and labor”, said Rick Judson, NAHB chairman Rick Judson.
For a third consecutive quarter, San Francisco-San Mateo-Redwood City, Calif. held the lowest spot among major markets on the affordability chart. There, just 19.3 percent of homes sold in the second quarter were affordable to families earning the area’s median income of $101,200.
“Rising home prices signal the improving health in housing markets, and the median price of all new and existing U.S. homes sold in this year’s second quarter, at $202,000, was well ahead of the second quarter 2012 median price of $185,000,” said David Crowe, NAHB chief economist.