A larger share of homebuyers report being able to afford half or more of the homes available for sale in their markets during the first quarter of 2021 compared to one year ago. According to the National Association of Home Builders’ Housing Trends Report, 35% of homebuyers report being able to afford half or more of homes for sale in their markets while 65% can afford fewer than half. One year ago, those shares were 24% and 77%, respectively. It’s an indication that relatively low mortgage rates continue to assist with affordability amid increasing home prices.
Nonetheless, a majority of buyers (65%) do report being able to afford fewer than half the homes available in their markets, but that share is down from 78% a year earlier.
Millennials report the most improvement in housing affordability perceptions in the last year. Between the first quarters of 2020 and 2021, the share of buyers of this generation who can afford half or more of the homes available doubled (22% to 44%), while changing little among the other generations. Across regions, the share of buyers who can afford half or more of the homes more than doubled in the Northeast (19% to 46%) and rose significantly in the West (20% to 37%).
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