Due to rising mortgage rates, high inflation, low existing inventory, and elevated home prices, affordability fell to its lowest level since the Great Recession in the second quarter of 2022, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI). According the the HOI, 42.8% of new and existing homes sold between the beginning of April and the end of June were affordable to families earning the U.S. median income of $90,000. As recently as the first quarter of 2022, 56.9% of homes sold were affordable to median-income earners. In a post on the Eye on Housing blog, the NAHB outlines the change in median home price during the quarter, as well as the five most and least affordable major housing markets.
The HOI shows that the national median home price jumped to an all-time high of $390,000 in the second quarter of 2022, surpassing the previous record-high of $365,000 set a quarter earlier. Meanwhile, average mortgage rates soared from 3.86% to 5.33% during this period.
The top five most affordable major housing markets in the second quarter of 2022 were:
- Lansing-East Lansing, Mich.
- Indianapolis-Carmel-Anderson, Ind.
- Toledo, Ohio
- Harrisburg- Carlisle, Pa.
- Scranton-Wilkes-Barre, Pa.
The top five least affordable major housing markets—all located in California were:
- Los Angeles-Long Beach-Glendale
- Anaheim-Santa Ana-Irvine
- San Diego-Chula Vista-Carlsbad
- San Francisco-San Mateo-Redwood City
- San Jose-Sunnyvale-Santa Clara
