"Housing affordability continues to strengthen for the eighth consecutive month. NAR's Housing Affordability Index rose to 117.6 in February, up slightly from 117.1 in January and significantly higher than 103.1 one year earlier—the highest reading since March 2022. Despite the modest gain in home sales, actual housing demand remains muted relative to wage growth and job gains."
"Even though there is pent-up demand in the market, there appears to be little urgency on the part of either buyers or sellers. While sales ticked up seasonally between January and February, economic uncertainty and potentially winter weather kept more buyers from entering the market last month."
"If demand picks up notably in the coming months and outpaces supply growth, home prices will inevitably rise. That is why increasing supply is so important to help limit home price growth, improve housing affordability, and boost transactions."
Housing affordability strengthened to its highest level since March 2022, with the NAR Housing Affordability Index rising to 117.6 in February. Wage growth now outpaces home price growth by nearly four percentage points, and mortgage rates are measurably lower than a year ago. However, home sales remain down by one million annually compared to pre-pandemic levels, despite 6 million more jobs existing than in 2019. Multiple factors suppress transaction volume, including economic uncertainty, lack of urgency from buyers and sellers, and limited inventory. Housing supply expanded modestly to 1.29 million units, representing 3.8 months of inventory at current sales pace. Increasing supply is critical to limit future home price growth and improve affordability.
Read at www.housingwire.com
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