US Housing Affordability Sets New Record Low in Q4
Housing Affordability Hits Record Low but Turning Point Lies Ahead
According to the recent National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI), just 38.1% of new and existing home sold between October and the end of December 2022 were affordable to families earning the US median income of $90,000. The index trails the previous marks of 42.2% in 2022Q3 and 42.8% in 2022Q2.
The NAHB says that a recent drop in mortgage rates over the past two months signals that declining affordability conditions may have reached their low point for this cycle.
While the HOI shows that the national median home price fell to $370,000 in 2022Q4, it is still the third-highest median home price in the history of the series, trailing behind only the $380,000 median home price recorded in 2022Q3 and the all-time high record of $ 390,000 reported in 2022Q2. Mortgage rates reached as series high of 6.80% in 2022Q4, surpassing the previous record high of 5.72% in Q3 of 2022.
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