Supply Chain, Interest Rates Put Home Affordability at 10-year Low: NAHB Index
Originally published on February 8, 2022 by Rose Quint for NAHB.
Supply-chain bottlenecks that put upward pressure on home prices along with rising interest rates contributed to housing affordability falling to a 10-year low. The likelihood of higher interest rates in the months ahead (as the Federal Reserve moves to tighten interest rates) along with ongoing production challenges threaten to drive housing affordability even lower in 2022.
According to the National Association of Home Builders (NAHB)/Wells Fargo, Housing Opportunity Index (HOI) released today, just 54.2% of new and existing homes sold between the beginning of October and the end of December were affordable to families earning the U.S. median income of $79,900. This is down from the 56.6% of homes sold in the third quarter of 2021 and is the lowest affordability level recorded since the beginning of the revised series in the first quarter of 2012.