Unsurprisingly, Housing Affordability Continues to Fall

Rising mortgage rates, high inflation, ongoing building material supply chain disruptions, and elevated home prices contributed to housing affordability falling – yet again – to its lowest point since the Great Recession in the third quarter of 2022.

According to the NAHB/Wells Fargo Housing Opportunity Index (HOI), just 42.2% 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 $90,000. This marks the second consecutive record low for housing affordability in more than a decade, trailing the previous mark of 42.8% set in the second quarter.

While the HOI shows that the national median home price fell to $380,000 in the third quarter, it is still the second-highest median price in the series, after the $390,000 recorded in the previous quarter. Meanwhile, average mortgage rates reached a series high of 5.72% in the third quarter, up from 5.33% a quarter earlier.

The top five most affordable major housing markets in the third quarter of 2022 were:

  1. Lansing-East Lansing, Mich.
  2. Indianapolis-Carmel-Anderson, Ind.
  3. Scranton-Wilkes-Barre, Pa.
  4. Toledo, Ohio
  5. Syracuse, N.Y.

Top five least affordable major housing markets—all located in California:

  1. Los Angeles-Long Beach-Glendale
  2. Anaheim-Santa Ana-Irvine
  3. San Diego-Chula Vista-Carlsbad
  4. Oxnard-Thousand-Oaks-Ventura
  5. San Francisco-San Mateo-Redwood City

Meanwhile, Cumberland, Md.-W.Va. was rated the nation’s most affordable small market, with 92.1% of homes sold in the third quarter being affordable to families earning the median income of $71,300.

The top five least affordable small housing markets were also in the Golden State. At the very bottom of the affordability chart was Salinas, Calif., where 5.9% of all new and existing homes sold in the third quarter were affordable to families earning the area’s median income of $90,100.

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

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