“Affordability woes continue to mount” – NAHB

The $10,100 year-over-year gain in national median income helped offset the gradual rise in interest rates and the $45,000 increase in the median home price, up to $365,000 in the first quarter.

However, when based on the average mortgage rate of 5.11% in April, nationwide housing affordability plummeted to 48.7 during the first three months of 2022 households – the lowest affordability level recorded since 2012.

According to NAHB, every quarter-point hike in mortgage rates means that 1.3 million households are priced out of the market for a nationwide median-priced home.

Read more: US housing crisis – Homebuilders call out government

“Looking at current market conditions, affordability woes continue to mount as rising interest rates and home building material costs that are up 20% year-over-year are causing housing costs to rise much faster than wages,” said NAHB chief economist Robert Dietz. “The HOI falling below 50 using these real-time estimates is an indication of significant housing affordability burdens, particularly for frustrated, prospective first-time buyers. The best way to ease growing affordability challenges is for policymakers to address ongoing supply chain disruptions that will allow builders to construct more affordable homes.”