Housing affordability continued to near its lowest level in more than a decade in the fourth quarter of 2023, as only 37.7% of existing homes sold were affordable to families earning the U.S. median income of $96,300.
The results were nearly unchanged from the 37.4% recorded in the third quarter of 2023, which marked the lowest reading since 2012, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index.
Mortgage rates hit more than a 20-year high during the quarter.
“Affordability conditions should show some gradual improvement this year, as mortgage rates peaked in the fourth quarter of 2023 and are now well below 7%,” stated NAHB Chairman Alicia Huey. “But even as lower interest rates track with our latest builder surveys that indicate an upturn in builder confidence in the single-family market, affordability conditions will remain challenging as builders contend with a high-cost regulatory environment and a chronic shortage of workers and buildable lots.”
According to the National Association of Realtors, more than 85% of metro areas posted home price gains in the fourth quarter of 2023, with the median single-family existing home price rising 3.5% year-over-year to $391,700.
