Home prices and mortgage rates rose in the third quarter of 2013 putting buying a home out of reach for many families, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.

NAHB’s Housing Affordability Index showed that 64.5 percent of new and existing homes sold between the beginning of July and end of September were affordable to families earning the nationwide median income of $64,400. That represents a drop from 69.3 percent in the second quarter, and marks the largest index drop since the second quarter of 2004. 

"Housing affordability is being negatively affected by a 'perfect storm' scenario," says NAHB Chairman Rick Judson. "With markets across the country recovering, home values are strengthening at the same time that the cost of building homes is rising due to tightened supplies of building materials, developable lots, and labor."     

While housing affordability has fallen since its peak in early 2012, NAHB Chief Economist David Crowe says that a family earning a median income can still afford 65 percent of homes recently sold. 

The National Association of REALTORS(R) recently reported that housing affordability has fallen to a five-year low as home price increases have outpaced income growth. “Expected rising mortgage rates will further lower affordability in upcoming months,” says Lawrence Yun, NAR’s chief economist.

We are definitely seeing this affordability being influenced higher prices and higher mortgage rates in the Tampa area. Experts predict jome prices and mortgage rates will continue to rise in 2014, making this the perfect time to buy a home.

If you are wondering how your home buying potential is effected by the increaded prices and rates, contact us and we'll be glad to review your situation with you.

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