Housing Market Improves; Policy Challenges Await

Housing affordability slipped nationwide as home prices in recovering markets rose during the second quarter, according to the National Association of Home Builders (NAHB) Wells Fargo Housing Opportunity Index (HOI). Of all new and existing homes sold in the first quarter of 2013, 73.7 percent were affordable to families earning the U. S. median income of $64,400. In the second quarter that ended in June, 2013, that number had dropped to 69.3 percent, as MHPronews has learned. Says NAHB Chief Economist David Crowe, “Rising home prices signal the improving health in housing markets, and the median price of all new and existing U.S. homes sold in this year’s second quarter, at $202,000, was well ahead of the second quarter 2012 median price of $185,000. Together with rising mortgage rates, this contributed to affordability slipping to the lowest level in more than four years. Such movement would be less concerning were it not for ongoing discussions regarding potential changes to the mortgage interest deduction and federal support for the secondary mortgage market, both of which play enormous roles in keeping homeownership affordable.”

(Photo credit: Paul Sakuma/Associated Press)

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