Economists Urge Political Action to Address Housing Affordability
U.S. housing affordability maintained its decade-long low in the fourth quarter of 2018, prompting economists to question the lack of political efforts to redirect home pricing. On Feb. 14, the National Association of Home Builders (NAHB) and Wells Fargo released its joint Housing Opportunity Index (HOI) that found a slight uptick in new and existing homes sold between October and December, homes deemed affordable for families with a median income of nearly $72,000.
According to the report, 56.6% of these homes were affordable, up 0.2% from the third quarter. While the median home price decreased by $5,000 to a total of $263,000, NAHB states mortgage rates increased to rate highs last seen in the second quarter of 2011. NAHB Chairman Randy Noel said in the report that "burdensome regulations, higher material costs and shortages of lots and labor" are struggles currently faced by the construction industry.
"Historically, housing has been the canary in the coal mine, and these ongoing affordability woes should serve as a wakeup call to policymakers to take immediate action," Noel said in the article.
That's not to say there isn't a demand for housing, added NAHB Chief Economist Robert Dietz, who said "home price appreciation has outpaced wage gains."
"To keep housing moving forward, policymakers at all levels of government should make it a priority to address affordability concerns that are hurting home buyers and home builders alike," Dietz said in the report.
—Andrew Michaels, editorial associate