More Than One Third Cannot Buy Boston Area Homes

Rising prices of Boston area homes have helped restore home equity to many, but more than a third of potential homebuyers — 38 percent — earning the national median household income of $63,900 cannot afford to buy Boston area homes that sold over the last quarter.

Rising Prices of Boston area homes are contributing to many potential home buyers not being able to afford to purchase.

Rising Prices of Boston Area Homes Partly to Blame

The rising prices of Boston area homes are partly to blame, along with stagnant incomes, mounting student loan debt and tougher credit standards requiring unattainable down payments.

The national median home price increased from $214,000 in the second quarter to $221,000 in the third quarter. Meanwhile, average mortgage interest rates slid from 4.44 percent to 4.35 percent in the same period, according to home builders.

“Even with nationwide home prices reaching their highest level since the end of 2007, affordability still remains fairly high by historical standards,” according to NAHB Chief Economist David Crowe. “Rising employment and incomes, interest rates that remain near historically low levels, and pent-up demand should contribute to positive momentum heading into next year.”

Overall, 61.8 percent of new and existing Boston area homes sold between the beginning of July and the end of September were affordable to families earning the U.S. median income. That’s down from the 62.6 percent of homes sold that were affordable to median-income earners in the second quarter.

We have more articles about the rising prices of Boston area homes and the affordability factor of Boston area homes in the Boston Real Estate section of articles under our Boston Real Estate Categories to your right.

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Also of Interest  Boston Area Real Estate News - September 2014