According to the second quarter of 2020’s Housing Trends Report, only 24% of prospective buyers can afford at least half the homes available in their markets. The other 77% are able to afford fewer than half the homes, says NAHB’s Rose Quint in a recent Eye On Housing blog post. Although these results demonstrate housing affordability remains a serious challenge, buyers’ affordability expectations are slightly more favorable than a year ago, when only 20% could afford at least half the homes for-sale and the other 80% could afford fewer than half. Falling mortgage rates are likely a key factor contributing to this slight uptick.
Despite some buyers’ improved prospects, over 75% of buyers of every generation can afford fewer than half the homes for sale in their markets. Geographically, over 70% of prospective buyers in every region of the country can afford fewer than half the homes available.
The timing of the data collection for this report (June 16-28) is important, as results need to be interpreted in the larger context of the US economy and the trajectory of new case counts at the time. In June, the labor market showed signs of recovery, gaining 4.8 million jobs and a lower unemployment rate. The 30-year fixed mortgage rate continued to fall, reaching 3.13% by the last week of the month. The number of COVID cases nationally were stable through the first half of the month, only beginning their ascent around June 15. For these reasons, we assess that responses in this quarter’s report reflect a period when workers were returning to their jobs, mortgage rates looked increasingly attractive, and the pace of new cases had only recently started to regain speed.
See more at NAHB’s Eye on Housing blog.