Higher Home Prices and Mortgage Rates Cause Housing Affordability to Shrink in Q2

According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI), 40.5% of new and existing homes sold between the beginning of April and June were affordable to families earning the US median income of $96,300. This is down from 45.6% in Q1 and the second-lowest reading since NAHB began tracking affordability on a consistent basis in 2012.

The HOI reveals that the national median home price increased to $388,000 in Q2, up from $365,000 in Q1. At the same time, the average mortgage rate increased from 6.46% to 6.59%.

In Q2, the five most affordable housing markets were: Lansing-East Lansing, Michigan; Scranton-Wilkes-Barre, Pennsylvania; Harrisburg-Carlisle, Pennsylvania; Indianapolis-Carmel-Anderson, Indiana; and Pittsburgh, Pennsylvania.

In Q2, the five least affordable housing markets were all located in California: Los Angeles-Long Beach-Glendale; Anaheim-Santa Ana-Irvine; San Diego-Chula Vista-Carlsbad; Oxnard-Thousand Oaks-Ventura; and San Francisco-San Mateo-Redwood City.