Home price gains and higher mortgage rates have chipped away at affordability for buyers in some markets, the National Association of Realtors (NAR) reported.
The national median existing single-family home price in the fourth quarter of 2013 increased by 10.1 percent to $196,900 compared to the same quarter a year before, according to the trade group.
That price growth helped drive down NAR’s Housing Affordability Index by 11 percent in 2013, according to NAR numbers. The trade group said that affordability has declined further for first-time homebuyers making small down payments.
“The vast majority of homeowners have seen significant gains in equity over the past two years, which is helping the economy through increased consumer spending,” said Lawrence Yun, chief economist at NAR. “At the same time, home prices have been rising faster than incomes, while mortgage interest rates are above the record lows of a year ago. This is beginning to hamper housing affordability.”