Even
with the accelerating pace of home price increases, the National Association of
Home Builders (NAHB) still sees homes remaining affordable. The NAHB/Wells
Fargo Housing Opportunity Index for the fourth quarter of 2020 shows that affordability
remained steady during the quarter as “record-low mortgage rates offset record-high
home prices
.” NAHB analyst Rose Quint writes in the Eye on Housing blog
however, that “regulatory and supply-side
challenges threaten to aggravate affordability problems in the year ahead.” Quint says that, nationally, 58.3
percent of all homes, new and existing, that sold during the quarter were
affordable to households earning the adjusted U.S. median income of $72,900, identical
to the percentage in Q3. This was, however, the lowest percentage since the
same quarter in 2018.
The median income for Q4 2020 was provided by the
Department of Housing and Urban Development (HUD) based on estimates computed prior
to the onset of the COVID-19 pandemic. NAHB adjusted those income numbers down
by 7.1 percent to account for the pandemic’s effects.

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