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Housing affordability down to lowest in a decade due to high construction costs

Posted on February 21, 2022   |  

  • From October to December, 54.2% of new and existing homes were owned by households earning a median income of $79,900, down from 56.6% compared to in the third quarter of 2021 and the lowest affordability since the beginning of 2012 level.
  • Supply-chain disruptions arising from labor shortages to lumber to home appliances to garage doors and other building materials slowed construction times and drove home prices to a higher level.
  • The national median home value rose to $360,000 in the fourth quarter, up from $5,000 in the third quarter and up by $40,000 from the first quarter
  • Average mortgage rates increased by 21 basis points in the fourth quarter to 3.16% from 2.95% in the third quarter, and currently, mortgage rates are running above 3.5%.
  • With a population of 500,000, Lansing-East Lansing, Mich. was the most affordable significant housing market, with 90.6% of all new and existing homes sold in the fourth quarter being affordable for households earning the area's median income of $79,100.
  • The most affordable small market was Cumberland, MD.-W.Va. in which families earning an income of $60,800 owned 94% of homes that were sold in 4Q.