Home Affordability Sees Slight Uptick in June

Amongst all generations, more than 75% of homebuyers can afford less than half of the homes for sale in their markets. On average, 77% of prospective buyers can afford less than half of the listed homes, according to NAHB’s second quarter Housing Trends Report. This is an improvement from last year when 80% of buyers could afford less than half of homes. The change can be attributed to low mortgage rates, NAHB says, but the information was collected during a more positive time last month when employees were beginning to return to work and COVID-19 cases had yet to dramatically increase again.

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. 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.

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