Rising home prices push affordability lower in Washington metro area

Rising prices made homes less affordable in the second quarter, the National Association of Home Builders and Wells Fargo reported Tuesday.

According to the Housing Opportunity Index (HOI), 73.8 percent of all new and existing homes sold in the second quarter were affordable to families earning the national median income of  $65,000. This is down from a record-high 77.5 percent of homes that were affordable to median-income earners in the first quarter. 

In the Washington metro area, 73.3 percent of homes sold during the period were affordable to those earning the area’s median family income of $105,700. The Washington region ranked 172 out of the 226 metro areas surveyed. It was more affordable than Asheville, N.C. (182), Boulder, Colo. (183), El Paso, Tex. (198), Santa Fe, N.M. (202) and Dover, Del. (216).

“While interest rates and overall housing affordability remain very favorable on a historic basis, the decline in the latest HOI is a positive development because it is another signal that the housing recovery is starting to take root, and it lends needed confidence to prospective buyers and sellers who have been reluctant to move forward in the current marketplace,” NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla., said in a statement.

The most affordable housing market in the second quarter was Youngstown-Warren-Boardman, Ohio-Pa., where 93.4 percent of homes sold during the period were affordable to the area’s median family income of $55,700.  

The least affordable housing market in the second quarter was New York-White Plains-Wayne, New York-New Jersey, where only 29.4 percent of homes sold during the period were affordable to the area’s median family income of $68,300.  

Home prices increased between the first and second quarter in 92 percent of the regions covered by the report.

Kathy Orton is a reporter and Web editor for the Real Estate section. She covers the Washington metropolitan area housing market.

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