Are Low Rates Enough to Offset Rising Prices? Builders Say Yes

Are Low Rates Enough to Offset Rising Prices? Builders Say Yes

Even with the accelerating pace of home price increases, the National Association of Home Builders (NAHB) still sees homes remaining affordable. The NAHB/Wells Fargo Housing Opportunity Index for the fourth quarter of 2020 shows that affordability remained steady during the quarter as " record-low mortgage rates offset record-high home prices ." NAHB analyst Rose Quint writes in the Eye on Housing blog however, that "regulatory and supply-side challenges threaten to aggravate affordability problems in the year ahead." Quint says that, nationally, 58.3 percent of all homes, new and existing, that sold during the quarter were affordable to households earning the adjusted U.S. median income of $72,900, identical to the percentage in Q3. This was, however, the lowest percentage since the same quarter