WASHINGTON, DC — Supply-chain bottlenecks that put upward pressure on home prices, along with rising interest rates, contributed to housing affordability falling to a 10-year low, the National Association of Home Builders said.
According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI), released today, just 54.2% of new and existing homes sold between the beginning of October and end of December 2021 were affordable to families earning the U.S. median income of $79,900. This is down from the 56.6% of homes sold in the third quarter of 2021 and is the lowest affordability level recorded since the beginning of the revised series in the first quarter of 2012, the NAHB said.
The HOI revealed that the national median home price increased to a record $360,000 in the fourth quarter of 2021, up $5,000 from the third quarter and up $40,000 from last year’s first quarter.
Ongoing production challenges and the likelihood of higher interest rates in the months ahead threaten to drive housing affordability even lower in 2022, the Washington, DC-based NAHB said.