Housing Affordability Posts Solid Gain, but Still Much Lower From a Year AgoBy RISMedia Staff The latest National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI) tracks updates in housing affordability. The data found that nominal wage gains (unadjusted for inflation) combined with lower mortgage rates and home prices helped to boost housing affordability at the start of 2023. However, ongoing supply chain issues and wage growth cooling indicate concerns for the rest of 2023. Affordability also lags behind the beginning of 2022. Key details:
“An uptick in housing affordability in the first quarter of 2023 corresponds to a rise in builder sentiment over the same period as well as an increase in single-family permits,” said NAHB Chairman Alicia Huey, a custom home builder from Birmingham, Alabama. “And while buyer conditions improved at the beginning of the year, builders continue to wrestle with a host of affordability challenges. These include a shortage of distribution transformers and concrete that are delaying housing projects and raising construction costs, a lack of skilled workers and tightening credit conditions.” “Elevated interest rates and higher home prices coming out of the pandemic have left housing affordability conditions considerably lower on a year-over-year basis,” said NAHB Chief Economist Robert Dietz. “While affordability posted a gain in the first quarter, it is still well below the breakeven point of 50. The lack of housing units is the primary cause of the nation’s housing affordability challenges, and the best way to reduce housing costs and fight inflation is to put into place policies that will allow builders to construct more attainable housing.” For more information, visit https://www.nahb.org/news-and-economics/housing-economics/indices/housing-opportunity-index. |
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