The continued increase of home prices across the U.S. pushed housing affordability to a 10-year low during the second quarter of 2018, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index.
During the quarter, 57.1 percent of homes sold were affordable to families earning a median income of $71,900. The percentage is down from 61.6 percent during the first quarter of 2018 and represents the lowest reading since mid-2008, according to NAHB.
The median home price jumped 5 percent compared with the first quarter of 2018 to $265,000, becoming the highest quarterly median price in the history of the Housing Opportunity Index.
A tight housing inventory and increased construction costs are impacting the upward pressure on home prices, NAHB Chairman Randy Noel said in a statement.
“Meanwhile, tariffs on Canadian lumber imports into the U.S. are further eroding housing affordability,” Noel added. “Builders are struggling to manage these costs to ensure pricing does not outpace expected gains in wage growth.”
Syracuse, N.Y., was found to be the most affordable major housing market during the quarter, with 89.1 percent of all new and existing homes sold considered affordable to families with the area’s median income of $74,100. San Francisco was found to be the least affordable major market for the third straight quarter, with 5.5 percent of home sold deemed affordable to families earning the area’s median income of $119,600.
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