Are There Improvements in Housing Affordability?

The National Association of Home Builders’ Housing Trends Report found that 27% of home buyers said they could afford half or more of the homes on the market in their areas. This is up from this time last year that only reported 20% of buyers. Good news for buyers in the current market as housing affordability improved in the last 12 months. Many buyers are not as concerned with the rising home prices because of the record low mortgage rates.

When it comes to the percentage of buyers by generation Millennials were on top in the third quarter of 2020. Prospective home buyers by generation were as follows, Millennials were at 31% in the third quarter of 2020, next were Gen X at 29%, Gen Z at 26% and the Boomers were least at 19%. All were up from the third quarter of 2019 except for the Boomers who had a 4% decline.

Those who can afford half or more of the homes for sale by each region in the country also differed. In the third quarter of 2019, the Midwest had the highest percentage, but in the third quarter of 2020, the Midwest had the lowest percentage. The percent of prospective home buyers per region in the third quarter of 2020 were as follows, the Northeast had 39%, the West had 28%, the South had 24% and the Midwest had the lowest at 19%.

The Housing Trends Report (HTR) measures prospective home buyers’ perceptions about the availability and affordability of homes for sale in their markets. The data is derived from national polls where a sample of adult’s answers was used. The sample of adults was based on age, educational attainment, gender, race, and region. The report defines the generations as follows Gen Z born 1997 to 2002, Millennial born 1981 to 1996, Gen X born 1965 to 1980 and Boomer born 1946 to 1964.

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