Low mortgage rates buoyed housing affordability as home prices hit record highs during the fourth quarter of 2020. At the end of the year, the majority of existing and new homes sold were affordable to households earning a median income of $72,900, according to the National Association of Home Builders. But the share of affordable homes sold, 58.3%, remains the lowest reading since the end of 2018. NAHB warns that regulatory and supply-side challenges threaten to challenge affordability this year. Housing prices reached $320,000 during the fourth quarter of 2020 as mortgage rates fell to 2.85%.
Lansing-East Lansing, Mich. was the nation’s most affordable major housing market, defined as a metro with a population of at least 500,000. In Lansing-East Lansing, 89.9 percent of all new and existing homes sold in the fourth quarter were affordable to families earning the area’s median income of $75,000.
Meanwhile, Cumberland-Md.-W.Va., was rated the nation’s most affordable smaller market, with 96.4 percent of homes sold in the fourth quarter being affordable to families earning the median income of $57,500.
Los Angeles-Long Beach-Glendale, Calif. supplanted San Francisco-Redwood City-South San Francisco, Calif., as the nation’s least affordable major housing market. There, just 9.1 percent of the homes sold during the fourth quarter were affordable to families earning the area’s median income of $71,800.
Advertisement
Related Stories
Innovation
IKEA Model Home Aims to Ease the Trauma of Homelessness
Blending innovation with empathy and eco-conscious design, IKEA US unveils a pioneering model home in its Live Oak, Texas, store
Affordability
How Much Income Do First-Time Buyers Need to Afford the Average Home?
The median-priced home is unaffordable in 44 of the 50 largest U.S. metro areas
Affordability
What Is the Relationship Between Urban vs. Suburban Development and Affordability?
A new paper from Harvard's Joint Center looks at whether expanding the supply of suburban housing could, in turn, help make dense urban areas more affordable