Mirroring a national trend of rebounding home prices and rising mortgage rates, Palm Beach County, Fla., saw housing affordability fall to a 10-year low in the second quarter of 2018, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.
Just 54.9% of homes sold in Palm Beach County in the second quarter were affordable to a median-income family, according to the index. That's the lowest affordability reading since 2008.
That's based on a median home price of $260,000 (the measure combines new and existing houses, condos and townhouses) and a median income of $71,800.
Palm Beach County's affordability reached its nadir during the housing bubble and lending frenzy of 2007, when just 28% of homes were in reach of a typical buyer.
Nationally, 57.1% of new and existing homes sold between the beginning of April and end of June were affordable to families earning the U.S. median income of $71,900, the National Association of Home Builders said. That was down from the 61.6% of homes sold in the first quarter that were affordable to median-income earners and the lowest reading since mid-2008.
The national median home price jumped from $252,000 in the first quarter of 2018 to $265,000 in the second quarter, the highest quarterly median price on record. At the same time, average mortgage rates rose to 4.67% in the second quarter from 4.34% in the first quarter.
"Rising household formations, along with a strong economic expansion in the second quarter that has fueled job growth, will support housing demand in the second half of 2018," said NAHB Chief Economist Robert Dietz. "However, growing trade war concerns and the expectation of higher mortgage rates are additional headwinds negatively affecting housing affordability."
Syracuse, N.Y., was the nation's most affordable major housing market. There, 89.1% of all new and existing homes sold in the second quarter were affordable to families earning the area's median income of $74,100.
San Francisco remained the nation's least affordable major market. Just 5.5% of the homes sold in the second quarter of 2018 were affordable to families earning San Franciso's median income of $119,600.
