In the second and third quarters of 2022, more buyers were able to afford homes for sale in their markets, according to data from the National Association of Home Builders (NAHB). However, NAHB attributes this to a shift in the composition of the buyer pool—more prospective buyers with higher incomes and education levels who are better positioned to absorb interest rate increases and afford homes—rather than an overall increase in housing affordability.
In Q1 2022, 81% of prospective buyers could afford less than 50% of the homes for sale in their markets. In Q2 2022, the share decreased to 77%, and to 69% in Q3 2022. Meanwhile, during this same period, the share able to afford 50% or more of available homes increased from 19% to 31%.
Affordability expectations between the second and third quarters of 2022 improved in all regions. In the Northeast, the share of buyers only able to afford a minority of homes dropped from 73% to 66%; in the Midwest, from 84% to 83%; in the South, from 82% to 77%, and in the West, from 70% to 58%.
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