The National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI) has lamented on the consistent increase in the price of new homes, causing a sharp fall in housing affordability in the second quarter of 2021 unlike what was witnessed a decade ago.
NAHB alleged that soaring building material costs, high demand and low inventory have added tens of thousands of dollars to the price of a new homes.
The HOI shows that the national median home price surged to a record $350,000 in the second quarter, up $30,000 from the first quarter. This is the largest quarterly price hike in the history of the series.
Meanwhile, average mortgage rates increased by 13 basis points in the second quarter to 3.09 percent from the rate of 2.96 percent in the first quarter.
Pittsburgh, Pa. was the nation’s most affordable major housing market, defined as a metro with a population of at least 500,000. In Pittsburgh, 90.6 percent of all new and existing homes sold in the second quarter were affordable to families earning the area’s median income of $84,800.
However, Cumberland-Md.-W.Va., was rated the nation’s most affordable smaller market, with 94.0 percent of homes sold in the second quarter being affordable to families earning the median income of $60,800.
For the third straight quarter, Los Angeles-Long Beach-Glendale, Calif., remained the nation’s least affordable major housing market. There, just 8.4 percent of the homes sold during the second quarter were affordable to families earning the area’s median income of $78,700.
Four of the five least affordable small housing markets were also in the Golden State. However, at the very bottom of the affordability chart was Corvallis, Ore., where 7.2 percent of all new and existing homes sold in the second quarter were affordable to families earning the area’s median income of $93,000.
