Small Price and Rate Changes Make a Big Difference for Homebuyers

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Posted To: MND NewsWire

As home sales have slowed, attention has shifted to the subject of affordability. The combination of rising home prices and higher interest rates is blamed by many as the cause of the lagging sales. The National Association of Home Builders (NAHB) has just published a study which attempts to estimate the approximate effect of each increase in prices and each uptick in mortgage rates means in terms of how many households can afford to buy a new home. The study relies on mortgagee qualification criteria. NAHB’s latest estimates show that nationally, a $1,000 increase in the price of a median-priced new home (using the national figure of $355,183) will price 127,560 U.S. households out of the market. Based on their incomes and standard underwriting criteria, each of these households would be able…(read more)

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