Home Affordability Shifts as Market Heats Up
Homes are becoming less affordable, according to a recent housing index. Affordability is slowly reversing a six-year trend of lows as prices inch up in many housing markets.
The National Association of REALTORS®’ Composite Housing Affordability Index dropped 1.2 percent in October compared to a year earlier.
Prices in many markets are rising as a housing recovery takes shape. But also stifling housing affordability is an increase in guarantee fees charged to lenders by Fannie Mae and Freddie Mac, Moneynews reports. Those fees recently reached a peak of 46 basis points, according to Capital Economics.