In a recent analysis by Windermere’s Chief Economist, Matthew Gardner, the focus has been on the trends in U.S. home prices and the state of housing affordability in 2023, drawing insights from ATTOM Data Solutions and the National Association of Home Builders (NAHB).
U.S. Home Prices: Although the Western U.S. experienced remarkable price growth during the pandemic, recent data indicates that sale prices in most states during Q2 were below those from a year ago. Positively, 36 states either matched or exceeded last year’s prices, some by significant margins.
Comparing with 2022: As compared to their 2022 peaks, 33 states have reached or surpassed last year’s highs. Still, the Western States have some ground to cover in recovery, with Louisiana in the South and New York on the East Coast notably trailing.
Metro Market Dynamics: Analyzing sale prices in specific metro markets reveals considerable variation. Roanoke, Virginia, Reading, Pennsylvania, and Macon, Georgia all saw significant growth above their state averages. Yet, some areas in California underperformed in comparison to the state’s average.
U.S. Housing Affordability: A concerning trend from the NAHB indicates that only 40.5% of sales in Q2 were affordable for households with median income levels. This statistic marks the second lowest affordability rate in a decade.
Most and Least Affordable Markets: The quarter’s most affordable markets had an average sale price of around $203,000, about half the national average. In stark contrast, the top 10 least affordable markets were all located in California, showcasing the state’s ongoing housing affordability crisis.
Mortgage Rate Insights: Notably, despite mortgage rates doubling from their previous lows, reaching 7% by Q2 2023, the housing market remains resilient. Gardner anticipates a gradual decrease in rates during the latter half of the year, which could improve housing affordability.
However, challenges persist. The housing market’s imbalance will likely remain until there’s a significant uptick in homes listed for sale.
Curious about the intricate details, specific state data, and deeper insights from Matthew Gardner’s analysis? Dive into the original report for a comprehensive view. Read the full blog post here.
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