Housing Affordability Hits 18-Month Low in Second Quarter of 2020

According to the National Association of Home Builders (NAHB) /Wells Fargo Housing Opportunity Index (HOI), housing affordability declined in the second quarter of 2020.  Record or near record mortgage rates could not overcome a supply shortage and rising home prices. In all, 59.6% of new and existing homes sold between the beginning of April and end of June were affordable to families earning an adjusted U.S. median income of $72,900. This is down from the 61.3% of homes sold in the first quarter of 2020 that were affordable to median-income earners and the lowest reading since the fourth quarter of 2018. The HOI shows that the national median home price jumped to a record $300,000 in the second quarter of 2020 up from $280,000 in the first quarter of 2020. Meanwhile, average mortgage rates fell by 27 basis points in the second quarter to 3.34 percent from 3.61 percent in the first quarter.