NAHB: Housing Affordability Increasing, Builders Still Challenged

Affordability is down, however, from Q1 last year when the HOI hit 56.9%. And it remains below the breakeven point of 50, NAHB noted.

“An uptick in housing affordability in the first quarter of 2023 corresponds to a rise in builder sentiment over the same period as well as an increase in single-family permits,” commented NAHB chairman Alicia Huey.

“And while buyer conditions improved at the beginning of the year, builders continue to wrestle with a host of affordability challenges. These include a shortage of distribution transformers and concrete that are delaying housing projects and raising construction costs, a lack of skilled workers, and tightening credit conditions,” she added.

The national median home price in Q1 declined by $5,000 from the prior quarter to $365,000, NAHB said. At the same time, average mortgage rates fell slightly from 6.8% to 6.46%, and the US median family income increased by 7%, or $6,300, to $96,300.

NAHB said the top five affordable major housing markets in Q1 were: Lansing-East Lansing, Mich.; Scranton-Wilkes-Barre, Pa.; Rochester, N.Y.; Toledo, Ohio; and Pittsburgh, Pa. The top five least affordable major housing markets were all located in California.

By Laura Miller, laura@steelmarketupdate.com