In the final quarter of 2019, a series-high of 82% of prospective buyers could afford less than half the homes available in their markets. The share went on to decline throughout 2020 (i.e. affordability perceptions improved), reaching 63% by the final quarter of that year. But affordability expectations have worsened recently. In the first and second quarters of 2021, the share who can only afford less than half the homes in their markets rose again, to 65% and 71%, respectively. The increase is new evidence that rising home prices have begun to have a stronger effect on perceptions of affordability than still-relatively low mortgage rates.
Affordability expectations have worsened in every region of the US. From the final quarter of 2020 to the second quarter of 2021, the share of buyers who could afford less than half the homes for-sale in their markets rose 51% to 66% in the Northeast, 74% to 83% in the Midwest, 68% to 75% in the South, and 61% to 70% in the West.
* All national and regional series in the HTR were seasonally adjusted for the first time in the second quarter of 2021. As a result, all data prior to this quarter have changed, as they now reflect the seasonal adjustments. Moving forward, non-seasonally adjusted data will no longer be published.
**The Housing Trends Report (HTR) is a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets. The HTR is produced quarterly to track changes in buyers’ perceptions over time. All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult. Results are seasonally adjusted. A description of the poll’s methodology and sample characteristics can be found here. This is the fourth in a series of six posts highlighting results for the second quarter of 2021.