Home price increases outpacing wages by leaps and bounds has caused housing affordability to fall to a 10-year low. According to the National Association of Home Builders/Wells Fargo Housing Opportunity Index, just over half of new and existing homes sold between October and December were affordable for families earning the U.S. median income of $79,900.
Should mortgage rates continue to move higher this year, the price home buyers can afford to pay will continue to shrink.
California continues to dominate the list of most unaffordable housing markets with Los Angeles-Long Beach-Glendale remaining the least affordable in the U.S. for the fifth consecutive quarter. Just 7.5 percent of homes sold in the area were affordable to households earning the median income for the region of $80,000 annually.
Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 3.75 percent and 15-year rates are near 3.125 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.