By NA Zhau
Copyright © 2014 National Association of Home Builders
NAHB Economics recently released its 2016 “Priced Out” Estimates showing that, nationally, a $1,000 increase in the median new home price (triggered, for example, by additional regulation) will leave 152,903 households priced out of the market. This means that 152,903 U.S. households could qualify for a mortgage on the median-priced new home before, but not after, the price increases.
The number of priced-out households varies across both state and metropolitan area. The differences are largely driven by the size of the population and the affordability of new homes. Among all the states, California registers the largest priced out effect where a $1,000 new home price increase pushes 15,328 households out of the market, followed by Texas (13,674), and Pennsylvania (9,374).
The initial affordability of new homes is an important element in determining the size of the priced out effect. On a percentage basis, priced out effects are higher in areas where new homes are more affordable. For example, in Chicago-Naperville-Elgin ... read the article at the NAHB website