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Housing affordability took a hit in the second quarter but remains historically high, according to the Housing Opportunity Index (HOI) released by the National Association of Home Builders (NAHB) and Wells Fargo.
As of the end of the second quarter, 62.6 percent of Americans earning the national median income could afford a median-priced home purchased over the quarter. This compares to 65.5 percent in the first quarter of the year.
However, the decline in affordability is nothing to worry about, according to NAHB.
"While we are seeing a slight decrease in affordability, it is still fairly high by historical standards," said David Crowe, chief economist at NAHB.
"The second quarter HOI reflects the slow but steady march toward the historic levels of price appreciation and interest rates that result in affordability levels we experienced before the mid-2000s boom," Crowe said.
The national median home price reached $214,000 in the second quarter, up from $195,000 in the first, while interest rates fell from 4.57 percent to 4.44 percent, according to NAHB.
RealtyTrac also noted declining affordability in a report released a week prior to NAHB's report, noting just more than one-third of counties surveyed across the country are experiencing their lowest affordability levels since 2000. However, like NAHB, RealtyTrac did not observe any "dangerously low" affordability levels anywhere in the country.
The National Association of Realtors was even more optimistic in a recent report, insisting buying power actually improved in the second quarter as the national median income rose over the year, mortgage rates declined, and home price appreciation waned.
Among the nation's largest metro areas, the San Francisco metro is the least affordable, according to NAHB, and it has held this status for seven quarters straight now. Of homes sold in the second quarter, 11.1 percent were affordable to those earning the area median income, which is $100,400.
Three other California metros followed at the least-affordable end of the spectrum: Santa Ana-Anaheim-Irvine; Los Angeles-Long Beach-Glendale; and San Jose-Sunnyvale-Santa Clara.
The most affordable major market is the Youngstown-Warren-Boardman, Ohio-Pennsylvania market, according to NAHB. Of homes sold in this metro in the second quarter, 90.4 percent were affordable to those earning the area median income of $52,700.
Other highly affordable major markets include Indianapolis-Carmel, Indiana; Syracuse, New York; Harrisburg-Carlisle, Pennsylvania; and Scranton-Wilkes-Barre, Pennsylvania.
