Feb. 19--Slowing home appreciation and lower mortgage rates helped push up home affordability in the Chicago area at the end of 2014 -- but that was then and early 2015 may be another story.
During last year's final three months, 65.4 percent of all homes sold in the Chicago area were considered affordable to families with a median income of $72,830, according to data released Thursday by the National Association of Home Builders and Wells Fargo. The median price of a home sold last quarter was $200,000.
It was the best showing for local home affordability since the first quarter of 2014, because of a decline in home prices and mortgage interest rates.
The cost of borrowing funds to buy a home, however, is on the rise. The average rate on a 30-year, fixed-rate mortgage rose this week for the second consecutive week, to 3.76 percent, from 3.69 percent last week and 4.33 percent a year earlier, according to Freddie Mac's weekly survey. Economists at the agency predict that the average rate this year will be 3.9 percent and that, coupled with an uptick in home prices because of insufficient inventory, could put additional constraints on homebuying power.
The nation's most affordable large housing market at the end of last year was Syracuse, N.Y., while San Francisco and neighboring cities claimed the title of least affordable.
Nationally, almost 63 percent of all homes sold during the final three months of the year were considered affordable to families with a median income of $63,900.
mepodmolik@tribpub.com
