Buyers’ perceptions of housing affordability have deteriorated for three straight quarters, indicating that double-digit home price hikes over the past year have more than offset the positive impact that low interest rates had over the same time period.
In the third quarter of 2021, 73% of buyers estimated they could afford less than half the homes available for sale in their markets, according to survey results from the latest NAHB Housing Trends report. That share is up from 71% the prior quarter, 65% the quarter before that, and 63% in the final quarter of 2020.
Between the second and third quarters of 2021, affordability expectations worsened in the Northeast and South, as the share of prospective buyers reporting they were able to afford less than half the homes available rose from 66% to 69% and from 75% to 76%, respectively.
When measured from the final quarter of 2020 to now, however, buyers’ perceptions of affordability have deteriorated in every region of the United States.
Rose Quint, NAHB assistant vice president for survey research, provides more analysis in this Eye on Housing blog post.