Housing Affordability Is Falling
Michael Hyman, Research Assistant | January 12, 2015
As home prices rise, housing affordability on the national level has inched downward, making it less affordable to purchase a home despite the lowest mortgage rates in more than a year, according to the National Association of REALTORS®’ latest housing affordability index, reflecting November 2014 data.
Compared to last year, affordability has fallen in two of the four regions. While the Northeast saw affordability increase 2.6 percent year-over-year, the Midwest posted a 2.8 percent decline in affordability and the South saw a 1.6 percent drop in affordability compared to November 2013 data. In the West, affordability mostly remained flat year-over-year.
The median price for a single-family home is up from year ago levels, at $206,200 in November 2014, a 5.6 percent jump from November 2013. The increases are starting to moderate, according to NAR. The Midwest saw the highest increases in home prices year-over-year with a 7.1 percent rise in November 2014 compared to November 2013. The Northeast saw the smallest year-over-year price gain at 2 percent.
Source: National Association of Realtors\' Economic Outlook Blog