Soaring Material Costs, Rising Home Prices Cause Home Affordability to Plunge
The National Association of Home Builders is reporting this week that soaring building material costs, high demand and low inventory have added tens of thousands of dollars to the price of a new home and caused housing affordability to fall to its lowest level in nearly a decade during the second quarter of 2021.
According to the newest National Association of Home Builders / Wells Fargo Housing Opportunity Index, 56.6 percent of new and existing homes sold between the beginning of April and end of June were affordable to families earning the U.S. median income of $79,900. This is down sharply from the 63.1 percent of homes sold in the first quarter of 2021 and the lowest affordability level since the beginning of the revised series in the first quarter of 2012.
“Runaway construction cost growth, such as…