Rising prices and mortgage rates continued to undermine the purchasing power of first-time home buyers in the second quarter despite increased incomes, a real estate trade group said today.
And, the National Assn. of Realtors added, a prolonged conflict in the Middle East will drive up mortgage rates even further, adversely affecting not only the entry-level sector, but the entire housing market as well.
The Realtors said its first-time home buyer affordability index was 72.9 in the April-June period, meaning a typical renter family with wage earners between 25 and 44 years old had 72.9% of the income needed to qualify for financing to buy a typical starter home.
The index measured 73 during the previous quarter. The Realtors' composite index measuring the affordability of all buyers of existing homes was 104 during the second quarter, down from 104.3 from January through March.