According to the National Association of Home Builders / Wells Fargo Housing Opportunity Index, solid home price appreciation more than offset a modest reduction in mortgage interest rates to push housing affordability lower in 2Q 2016.
The national median home price increased from US$223,000 in 1Q 2016 to US$240,000 in 2Q. Meanwhile, average mortgage rates edged lower from 4.05 per cent to 3.88 per cent in the same period.
According to historical data, housing affordability usually takes a notch down in 2Q as a result of high prices caused by strong sales in warmer days. This is the sixth consecutive year that the HOI has decreased in the second quarter.
NAHB’s quarterly Housing Opportunity Index gauges the share of affordable housing on the market for families earning the national median income. A total of 236 metropolitan areas were covered in the research for 2Q 2016.