Income growth, slower home price appreciation, and falling mortgage rates all combined to ease housing affordability in the first quarter of 2019, running roughly even over the previous year.
According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI), inventory remains a struggle for buyers, particularly at the entry level. Overall, 61.4 percent of new and existing home sales in the first quarter were affordable to families earning the national median income, $75,500, up 4.8 percent over the previous quarter, and down two basis points from Q1 2018.
The national median home price moved down from $262,500 in the fourth quarter of 2018 to $260,000 in the first quarter. At the same time, average mortgage rates fell by 25 basis points in the first quarter to 4.64 percent from 4.89 percent in the fourth quarter.