Higher prices means less affordable housing

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The slowly rising housing prices could make it a little harder for most Americans to buy a home, according to a industry survey.

The National Association of Home Builders (NAHB) and Wells Fargo has said just about 74% of the new and existing homes sold in the past three months ended on June 30 were  families who earn the national median income of $65,000. That came down from the 77.5% a quarter earlier. Historically speaking is still a very high level of affordability.

The decline of affordability could be traced back to the increase in home prices. Median home prices were up 92% of the market surveyed, while median income didn’t budge.

Barry Rutenberg, NAHB’s chairman and a home builder from Gainesville, Fla., said the decline in affordability was a positive sign for the market. “[It’s] another signal that the housing recovery is starting to take root, and it lends needed confidence to prospective buyers and sellers who have been reluctant to move forward in the current marketplace,”.

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