WASHINGTON–An increase in home price appreciation has helped to offset a small decline in mortgage rates, resulting in a small decline in housing affordability during the third quarter of 2016, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.
The index found that 61.4% of new and existing homes sold between July 1 and Sept. 30 were affordable to families earning the U.S. median income of $65,700. That figure is down from the 62% of homes sold that were affordable to median-income earners in the first quarter, according to the Housing Opportunity Index.
The Index found that the national median home price increased from $240,000 in the second quarter to $247,000 in the third quarter. Meanwhile, average mortgage rates edged lower from 3.88% to 3.76% in the same period.
Elgin, Ill., was rated the nation’s most affordable major housing market, where 94.3% of all new and existing homes sold in this year’s third quarter were affordable to families earning the area’s median income of $82,500, according to the Index.
Not surprisingly, for the 16th consecutive quarter, San Francisco-Redwood City-South San Francisco, Calif., was the nation’s least affordable major housing market.