Housing affordability has now reached a 10-year low in the second quarter of 2018, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.
“Tight inventory conditions and rising construction costs are factors that are holding back housing and putting upward pressure on home prices,” NAHB Chairman Randy Noel said. “Meanwhile, tariffs on Canadian lumber imports into the U.S. are further eroding housing affordability.”
Homebuilders are struggling to ensure pricing does not outpace expected gains in wage growth, according to Noel.
In fact, only 57.1% of new and existing homes sold between the months of April and June were affordable to families earning the U.S. median income of $71,900.
This is the lowest reading since mid-2008 and is down from the 61.6% of homes sold in Q1 that were affordable to median-income earners, according to the report.
“Rising household formations,…