Eye On Housing
San Francisco, which has been the nation’s least affordable major housing market for nearly five years, was supplanted by Los Angeles in the third quarter of 2017, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI).
Nationwide, 58.3 percent of new and existing homes sold between the beginning of July and end of September were affordable to families earning the U.S. median income of $68,000. This is down from the 59.4 percent of homes sold that were affordable to median-income earners in the second quarter.
The national median home price rose to $260,000 in the third quarter from $256,000 in the second quarter of 2017. Meanwhile, average mortgage rates inched up 2 basis points in the third quarter to 4.1 percent from 4.08 percent in the second quarter.
For the fourth consecutive quarter, Youngstown-Warren-Boardman, Ohio-Pa., was rated the nation’s most affordable major housing market. There, 90.1 percent of all new and existing homes sold in the third quarter were affordable to families earning the area’s median income of $54,600. Meanwhile, Wheeling, W.Va.-Ohio was rated the nation’s most affordable smaller market, with 94.7 percent of homes sold in the third quarter being affordable to families earning the median income of $56,100.
Los-Angeles-Long-Beach-Glendale, Calif. assumed the mantle as the nation’s least affordable major housing market. There, just 9.1 percent of the homes sold during the third quarter were affordable to families earning the area’s median income of $64,300.
All five least affordable small housing markets were also in the Golden State. At the very bottom of the affordability chart was Salinas, where 11.3 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.
The article mentions that the five least affordable housing markets are in California, but according to the full list at https://www.nahb.org/en/research/housing-economics/housing-indexes/~/media/3BCFD33FA33149D6806F9E6D780B4959, California markets occupy 15 “”least affordable”” slots (and 20 of the “”top”” 25). Perhaps its time to seriously look at the components there that make housing so unaffordable, including density and land-use regulations that deter construction. It may also be that, in order to help lessen the pressure on price and improve affordable housing opportunities that both large and small employers need to be lured away from the coasts.
With regard to the overall list, it would be interesting to see a kind of “”velocity meter”” or at least a reference to help determine the speed at which markets are becoming less (or relatively) more affordable over time. This might help policy makers have a chance to take preventative or at least ameliorative actions before the situation worsens in their market.
Good suggestion. Thanks.