Boca Mortgage Blog

Second Quarter Home Affordability Index Shows Decline in Specific Areas

August 20th, 2014 10:53 AM by Leonard Silvestri

According to the National Association of Home Builders and the Wells Fargo Housing Opportunity Index, the national affordability of homes in small housing markets has dropped by 3.1%. The first quarter index reported 65.5% while the second quarter reported 62.6%. The index measures the percentage of purchased homes per quarter that were affordable to families earning the U.S. median income.

The U.S. median income in the second quarter was $63,900 and a median priced come cost $214,000 compared to $195,000 in the previous quarter. Interest rates, another factor in affordability, compensated a bit for the rising home prices, decreasing by an average of 13 basis points to 4.44 percent. "The second quarter HOI reflects the slow but steady march toward the historic levels of price appreciation and interest rates that result in affordability levels we experienced before the mid-2000s boom," said NAHB Chief Economist David Crowe. "While we are seeing a slight decrease in affordability, it is still fairly high by historical standards."

Posted in:General
Posted by Leonard Silvestri on August 20th, 2014 10:53 AM


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