New Information from the NAHB Reveals a Drop in Affordability Due to Rising Home Prices

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Real Estate Marketing Insider comments about the data released by the NAHB that indicates a decrease in the affordability level of housing in many areas and a concurrent increase in home prices.

Tobias Nergarden issued his observations on the NAHB’s information indicating that rising housing prices are also causing a drop in affordability today and his opinion is that it will help home sellers as they will be able to get higher prices for their homes, because this information indicates that an actual housing recovery is taking place, and is helpful for real estate advertising agencies as well.

The National Association of Home Builders (NAHB) in conjunction with Wells Fargo released an updated Housing Opportunity Index (HOI) indicating that the average percentage of affordable homes has fallen from a record high of 77.5 percent to 73.8 percent in the second financial quarter of the year. This drop is attributed to rising housing prices seen as a sign of a housing recovery. Affordable homes are considered those affordable by anyone making the median American income of $65,000.

The National Association of Home Builders is a trade association designed to represent anyone involved in the process of building homes. This group mainly consists of home builders and remodelers, but there are also large numbers of people tangentially involved in construction like materials suppliers and mortgage lenders. These members are involved in 80 percent of home construction in the United States each year.

Wells Fargo, headquartered in Sioux Falls, South Dakota is one of the largest banking organizations in the United States and is heavily involved in mortgage finance. The home loan branch of Wells Fargo is involved in a quarter of home loans in the United States. The 2008 financial crisis did result in an influx of bailout funds from the Federal government with more required if the economy, including private property sales, does not show improvement.

A financial quarter is 25% of the fiscal year, a twelve month period in which a business or government is responsible for creating and releasing a financial statement. These fiscal years do not need to match up with a calendar year. For the United States government, the fiscal year begins on October 1st. The first quarter is from the beginning of October until the end of December and the second quarter comprises the following three months.

Real Estate Marketing Insider today commented on the evidence for a housing recovery based on the information indicating rising housing prices and a slight drop in affordability.

About Real Estate Marketing Insider:
Real Estate Marketing Insider is based in La Jolla, California and is aimed at providing hot tips, news, analysis and other information to real estate professionals.

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