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Will Home Affordability Slip Out Of American's Reach?
A few less Americans were able to purchase their home and fulfill the purported American Dream according to the National Association of Home Builders. Nearly 74% of the new and existing homes sold in the three months ended June 30 were affordable to families who earn the national median income of $65,000, according to the National Association of Home Builders (NAHB) and Wells Fargo. That's down from 77.5% three months earlier, but is still considered a high level of affordability. It is believed that rising prices were responsible for the decline in affordability. Median home prices were up in 92% of the markets surveyed, while median income did not go up. It is interesting to note that this decline came despite record low mortgage rates. The 30-year fixed rate averaged almost 4% at the end of March and dropped to 3.66% by the end of June, according to Freddie Mac. But that wasn't enough to offset price increases and stagnant wages. According to the report, among major housing markets, Youngstown, Ohio had the most affordable prices. In town, 93.4% of homes sold could be comfortably purchased by residents with the typical family income of ... more
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