- The Midwest is the most affordable region, with the most affordable cities in the nation.
- No surprise: The West leads the nation in home price gains, but it is the least affordable.
- Similar increase in home prices likely, which should continue to reduce affordability.
The median price of a single-family home rose to $235,500 in July, a 5.8 percent year-over-year rise. At the same time, incomes nationally grew by 2 percent.
These stats don’t bode well for housing affordability, as indicated by a recent National Association of Realtors index. The findings show that affordability is down nationally from 155.4 in July 2014 to 151.2 in July of this year.
From one year ago, affordability is down in all regions except the Northeast, which saw an increase of 2 percent. This is likely because the region has witnessed only a 1.8 percent year-over-year increase in prices.
The West has seen the biggest decline in affordability at 4.3 percent and is considered the least affordable region. The West has also experienced the largest rise in home prices — 8.4 percent year over year.
Considered the most affordable region, the Midwest saw affordability decline by 3 percent, in part because of a 6.5 percent rise in home prices.
A separate report from WalletHub shows that the most affordable cities in the U.S. are all located in the Midwest. They include:
- Flint, Michigan
- Detroit
- Dayton, Ohio
- Joliet, Illinois
- Akron, Ohio
The South is the second most affordable despite overall home prices gains of 7.1 percent, according to NAR.
In its findings, WalletHub also ranked markets based on “affordability and economic environment.” Eight of the top 10 cities were located in Texas:
- Allen
- Frisco
- McKinney
- Austin
- Fort Worth
- San Antonio
- Denton
- Grand Prairie
The other top cities were Cary, North Carolina, and Gilbert, Arizona.
NAR also reported that July’s mortgage rate was down to 4.19, a drop of 6 basis points from last year. Mortgage applications are also currently down for new and existing homes, which could be a seasonal occurrence or a sign that rising rates are impacting affordability.
