Housing Affordability Declines Due to Economic Losses Stemming from COVID-19 Pandemic
In all, 61.3% of new and existing homes sold between the beginning of January and end of March, 2020, were affordable to families earning an adjusted U.S. median income of $72,900.
Surging job losses in March stemming from the COVID-19 pandemic contributed to a decline in U.S. median income and housing affordability in the first quarter of 2020, according to the most recent National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI). In all, 61.3% of new and existing homes sold between the beginning of January and end of March were affordable to families earning an adjusted U.S. median income of $72,900. This is down from the 63.2% of homes sold in the fourth quarter of 2019 that were affordable to households earning the median income of $75,500.
The Department of Housing and Urban Development’s original estimates of median family income for 2020 were developed prior to the COVID-19 pandemic. To account for the pandemic’s effects, the HUD estimates were reduced consistent with NAHB’s economic forecast for 2020. As a result, the 2020 national median income estimates used in the HOI calculations ($72,900) are 7.1% lower than the initial national 2020 estimates ($78,500) from HUD.