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Housing affordability has fallen to its lowest level in nearly a decade, as three market behaviors combine to create the perfect storm: soaring building material costs, high demand and low inventory.
According to the National Association of Home Builders (NAHB) / Wells Fargo Housing Opportunity Index (HO), 56.6% of new and existing homes sold between April and June were affordable for families earning $ 79,900, the current median income in the states. -United. This was down from 63.1% of homes sold in the first quarter of 2021 and is the lowest level of affordability since the revised series began in the first quarter of 2012.
Most affordable markets:
In Pittsburgh, 90.6% of all new and existing homes sold in the second quarter were affordable for families earning the area’s median income of $ 84,800.
The top five affordable housing markets were Lansing-East Lansing, Michigan; Youngstown-Warren-Boardman, Ohio-Pennsylvania; Scranton-Wilkes-Barre-Hazleton, Pennsylvania; and Harrisburg-Carlisle, Pennsylvania.
Least affordable markets:
For the third consecutive quarter, Los Angeles-Long Beach-Glendale, Calif., Remained the least affordable major real estate market in the country. Only 8.4% of properties sold in the second quarter were affordable for families earning the area’s median income of $ 78,700.
The top five least affordable markets were all in California: San Francisco-Redwood City-South San Francisco; Anaheim-Santa Ana-Irvine; San Diego-Carlsbad; and Oxnard-Thousand Oaks-Ventura.
Takeaway meals:
While a market slowdown has been observed in several parts of the country, industry professionals are closely monitoring inventory and lumber prices, as their trajectory could signal either market equilibrium or a another year of turbulent competition.
“Uncontrolled growth in construction costs, such as high prices for oriented strand board which have skyrocketed nearly 500% since January 2020, continues to put upward pressure on home prices,” he said. said NAHB President Chuck Fowke, a custom home builder from Tampa, Florida. . “Policymakers need to address supply chain bottlenecks for building materials that increase costs and undermine housing affordability. “
“A recent analysis from the NAHB shows that the higher costs of lumber products added nearly $ 30,000 to the price of an average new single-family home and raised the rental price of a new apartment by more than $ 30,000. $ 90, â€said Robert Dietz, chief economist of the NAHB. “With more than a million homes in the U.S. housing market below what is needed to meet the nation’s demand, policymakers need to focus on supply-side solutions that will enable builders to increase housing production and curb the rise in housing prices. “
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