Tag Archives: Housing Affordability

While most other reports have indicated a decline in Americans’ ability to pay for homes at the national median price ($205,000 as of Q4), NAHB’s latest index actually shows relative stability, with 64.7 percent of new and existing homes sold in Q4 classified as “affordable” to families earning the median income of $64,400. That result is a slight step up from the index reading of 64.5 percent recorded in Q3.

Yes, affordability (as measured by the National Association of Realtors' Housing Affordability Index) is down as much as 22 percent from its January 2013 peak, but is still far higher than it was in the early 2000s, says CoreLogic chief economist Mark Fleming in the company's February MarketPulse report. Moreover, Fleming notes the problem of "unaffordable housing" is one that only really exists for first-time homebuyers.

RealtyTrac released Thursday a new housing affordability analysis, noting an average 21 percent increase in monthly house payments from a year ago. The report showed that the average house payment of a home purchased in the fourth quarter of 2013 rose to $865. That figure is based on a 30-year fixed rate mortgage with an interest rate of 4.46 percent and a 20 percent down payment.

The National Association of Realtors (NAR) released its latest quarterly reports Tuesday, highlighting deteriorating conditions for housing affordability as prices keep trending upward. The national median existing single-family home price was $196,900 in the fourth quarter, up 10.1 percent from $178,900 in the fourth quarter of 2012. As ever, the association says the increase was driven by a tight supply of existing homes and a decline in production of new houses.

What sort of affect has the technology boom had on housing affordability in so-called ""tech hub"" markets? In a recent blog post, Trulia chief economist Jed Kolko argues that a higher price of living isn't a new problem for most tech-centric metros. Instead, he says, these markets are experiencing the lasting effects of having been some of the worst-hit during the bubble's collapse, contributing to their relatively larger price rebounds compared to most the country.

While the housing market is still far from normal, it is inching that way, according to a report released Thursday from Zillow. Last year's skyrocketing home price appreciation, frenzied demand from investors, and high tide of negative equity are all expected to subside somewhat this year, according to the real estate company. In fact, some of the markets that posted the highest price gains in 2013 are already slowing, a welcome sign for those that were at risk of crossing into "bubble territory."

Following a year of fast-paced appreciation, Fitch Ratings expects home price gains to slow to a more moderate pace in 2014 in the United States.

Zillow's Home Value Index (HVI) stood at $168,900 in November, an increase of 0.6 percent month-over-month. On a yearly basis, the index was up 7.1 percent, reflecting a slight slowdown from the 7.3 percent peak recorded in the summer. For the next 12-month period, Zillow anticipates "moderating influences" will lead to a fairly significant leveling off in appreciation rates, with values rising an estimated 4.6 percent to a national average of $176,731.

As prices continue rising in the new year--albeit at a slower pace--investors will begin to ease back from the purchase market, but repeat home buyers will be there to pick up the slack, according to Trulia's predictions. "2013 was the year of the investor, but 2014 will be the year of the repeat home buyer," said Jed Kolko, chief economist at Trulia. Other changes to the market in the new year include lower affordability, "less frenzied" home-buying, and a shift in the rental market from single-family homes to urban apartments.

The National Association of Realtors sent out a national survey in July, 2013 to buyers and sellers who made a transaction at some point in the last year. Among other findings, the survey showed increased use of online resources throughout the process. The first step in the process for 42 percent of buyers was searching online for properties. Use of the Internet to search for homes rose slightly to 92 percent. Eighty-eight percent of buyers purchased their home through an agent or broker--a share that has steadily increased from 69 percent in 2001.