Rising mortgage rates, inflation, building material supply chain disruptions, and elevated home prices contributed to housing affordability falling to its lowest point since the Great Recession in the third quarter, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI). According to the HOI, just 42.2% of new and existing homes sold in the third quarter were affordable to families earning the U.S. median income of $90,000.
While the HOI shows that the national median home price fell to $380,000 in the third quarter, it is still the second-highest median price in the series, after the $390,000 recorded in the previous quarter. Meanwhile, average mortgage rates reached a series high of 5.72% in the third quarter, up from 5.33% a quarter earlier.
The top five most affordable major housing markets in the third quarter of 2022 were:
- Lansing-East Lansing, Mich.
- Indianapolis-Carmel-Anderson, Ind.
- Scranton-Wilkes-Barre, Pa.
- Toledo, Ohio
- Syracuse, N.Y.
Top five least affordable major housing markets—all located in California:
- Los Angeles-Long Beach-Glendale
- Anaheim-Santa Ana-Irvine
- San Diego-Chula Vista-Carlsbad
- Oxnard-Thousand-Oaks-Ventura
- San Francisco-San Mateo-Redwood City
