Dive Brief:
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Despite a slight downtick in home prices in September, the slow but steady year-to-date increase in housing values is making it somewhat harder for middle-income families to afford to buy, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.
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Between July and September, 61.8% of new and existing homes that sold were affordable for buyers who earn $63,900—the median U.S. income. That’s a dip from 62.6% in the second quarter of 2014.
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As nearly 90% of metropolitan areas posted increases in home values this year, the median sales price rose from $214,000 in the second quarter to $221,000 by the end of September.
Dive Insight:
Although home prices are higher than they have been since 2007, economists say strong job growth and low mortgage rates will counteract the slight dip in affordability.
“This [is] a good time to buy a home,” NAHB Chairman Kevin Kelly said in response to Thursday’s report. NAHB Chief Economist David Crowe agreed: “Affordability still remains fairly high by historical standards." Crowe predicted the housing market will enjoy “positive momentum heading into next year.”