Housing affordability in the United States remained at a decade low in Q3 2018, as only 56.4 percent of new and existing homes sold during the three month period ending September 30 were affordable to families earning the U.S. median income of $71,900. That’s according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index
(HOI) released earlier this month.
“Continuing home price appreciation and rising interest rates coupled with persistent labor shortages are contributing to housing affordability concerns,” said NAHB Chairman Randy Noel, as the national median house price edged up to $268,000 in the third quarter.
The following chart illustrates the direct link between house prices and affordability. Home prices have reached historically high levels this year, exceeding the previous peak reached in 2006/2007 before the housing bubble burst. Back then, home affordability was even lower though, with only 40 percent of homes sold affordable to a median-income family.