Rising home prices offset a quarter-point drop in mortgage interest rates to move housing affordability slightly lower in the second quarter of 2017, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI). 

In all, 59.4 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 $68,000. This is down from the 60.3 percent of homes sold that were affordable to median-income earners in the first quarter.

The national median home price rose to $256,000 in the first quarter from $245,000 in the first quarter of 2017. Meanwhile, average mortgage rates fell 25 basis points in the second quarter to 4.08 percent from 4.33 percent in the first quarter.

For the third consecutive quarter, Youngstown-Warren-Boardman, Ohio-Pa., was rated the nation’s most affordable major housing market. There, 93.3 percent of all new and existing homes sold in the second quarter were affordable to families earning the area’s median income of $54,600. Meanwhile, Kokomo, Ind., was rated the nation’s most affordable smaller market for the second straight quarter, with 96.9 percent of homes sold in the second quarter being affordable to families earning the median income of $62,500.

For the 19th consecutive quarter, San Francisco-Redwood City-South San Francisco, Calif., was the nation’s least affordable major housing market. There, just 7.6 percent of homes sold in the second quarter were affordable to families earning the area’s median income of $113,100.

All five least affordable small housing markets were also in California. At the very bottom of the affordability chart was Salinas, where 12.4 percent of all new and existing homes sold were affordable to families earning the area’s median income of $63,100.

Visit nahb.org/hoi  for tables, historic data and details.

Tags: affordability, housing, housing economics