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Home | Daily Dose | Rising Prices Shrink Pool of Potential Home Owners
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Rising Prices Shrink Pool of Potential Home Owners

home-prices

As home prices continue to recover nationwide, a new study from the National Association of Home Builders (NAHB) suggests even a small increase in new home prices can leave hundreds of thousands of prospective buyers out in the cold.

Measuring housing costs against income distribution, the group estimates that as many as 206,269 households are effectively "priced out" of the market for each $1,000 increase in national median new home prices.

As of June, the Commerce Department estimates the median sales price of new homes was $273,500.

With increases in construction fees accounting for part of the rise in new home prices, NAHB Chairman Kevin Kelly said the recent study "highlights the real effects that building regulations have on housing affordability."

The association estimates every $833 increase in construction fees adds an additional $1,000 to a new home's final price.

While "price-out" numbers were high at the national level, NAHB noted the number of households affected varied from area to area, depending largely on population, income distribution, and local new home prices.

Among the states, the number of prospective buyers who would no longer be able to qualify for a conventional mortgage based on each $1,000 gain ranges from a low of 313 in Wyoming to a high of 18,250 in Texas.

"Local, state and federal government officials need to know that higher regulatory costs have real consequences for working American families," Kelly said. "Oftentimes, these government regulations end up pushing the price of housing beyond the means of many teachers, police officers, firefighters and other middle class workers."

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About Author: Tory Barringer

Tory Barringer
Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.

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