It’s getting harder and harder to afford a home.
Housing affordability continued to decline in the third quarter, as inventory shortages and rising home prices offset record-low mortgage rates, according to a new report released Friday by the National Association of Home Builders (NAHB).
The NAHB/Wells Fargo Housing Opportunity Index found that 58.3 percent of new and existing homes sold between the beginning of July and end of September were affordable to families earning an adjusted U.S. median income of $72,900 – down from 59.6 percent in the second quarter.
“A six-month supply of homes is considered a normal supply and demand balance, and this figure has been running below a four-month rate since July, putting upward pressure on home prices,” said NAHB Chief Economist Robert Dietz. “As builders look to ramp up production, the work-at-home trend is contributing to a suburban shift, meaning that buyers have additional market power to shop for affordable markets.”
NAHB said the national median home price jumped to an all-time high of $313,000 in the third quarter, surpassing the previous record-high of $300,000 set in the second quarter.
The most affordable housing markets were Lansing/East Lansing, Michigan, and Scranton/Wilkes Barre/Hazleton, Pennsylvania, where 89.4 percent of homes sold were affordable to median income families. Those two markets were followed by Pittsburgh, Harrisburg/Carlisle, Pennsylvania; and Albany/Schenectady/Troy, New York.
California continues to be home to the least affordable markets. In San Francisco, just 9 percent of homes sold were affordable to median income-earning families. The other least affordable areas were Los Angles, San Diego and San Jose.