For some home buyers, housing affordability improved in the last 12 months. According to the Housing Trends Report for the third quarter of 2020, 27% of buyers report being able to afford half or more of the homes available for sale in their markets. A year earlier, that share was 20%.
The increase is an indication that lower mortgage rates have had a stronger impact on some buyers’ perceptions of affordability than rising home prices. Nonetheless, it is important to keep in mind that most home buyers (72%) still say they can afford only a minority of the homes available in their markets.
Between the third quarters of 2019 and 2020, the share of buyers who can afford half or more of the homes available rose most significantly among millennials (17% to 31%), but dropped among boomers (23% to 19%). Across regions, the share rose most significantly in the Northeast (21% to 39%), but dropped in the Midwest (23% to 19%).
Rose Quint, NAHB's assistant vice president for survey research, provides more details in this Eye on Housing report.