Housing Affordability Posts Solid Gain but Still Much Lower from a Year Ago

Solid nominal wage gains (unadjusted for inflation) combined with lower mortgage rates and home prices helped to boost housing affordability at the start of 2023, but ongoing building material supply chain issues and expected wage growth cooling signal ongoing concerns for affordability conditions in the year ahead.

According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI), 45.6% of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $96,300. This is up from 38.1% posted in the fourth quarter of last year, which was the lowest level since NAHB began tracking affordability on a consistent basis in 2012. However, the first quarter 2023 HOI reading remains significantly lower than the first quarter 2022 score of 56.9%, a reminder of ongoing housing affordability challenges.

“An uptick in housing affordability in the first quarter of 2023 corresponds to a rise in builder sentiment over the same period as well as an increase in singlefamily permits,” said NAHB Chairman Alicia Huey, a custom home builder from Birmingham, Ala. “And while buyer conditions improved at the beginning of the year, builders continue to wrestle with a host of affordability challenges. These include a shortage of distribution transformers and concrete that are delaying housing projects and raising construction costs, a lack of skilled workers and tightening credit conditions.”

“Elevated interest rates and higher home prices coming out of the pandemic

The Most and Least Affordable Markets in the First Quarter

Lansing-East Lansing, Mich., was the nation’s most affordable major housing market, defined as a metro with a population of at least 500,000. There, 87.5% of all new and existing homes sold in the first quarter were affordable to families earning the area’s median income of $97,800.

Top five affordable major housing markets:

1. Lansing-East Lansing, Mich.

2. Scranton-Wilkes-Barre, Pa.

3. Rochester, N.Y.

4. Toledo, Ohio

5. Pittsburgh, Pa. Meanwhile, Cumberland, Md.-W.Va., was rated the nation’s most affordable small market, with 93.5% of homes sold in the first quarter being affordable to families

Top five affordable small housing markets:

1. Cumberland, Md.-W.Va.

2. Elmira, N.Y.

3. Kokomo, Ind.

4.Springfield, Ohio

5. Wheeling, W.Va.-Ohio

For the 10th straight quarter, Los Angeles-Long Beach-Glendale, Calif., remained the nation’s least affordable major housing market. There, just 4.1% of the homes sold during the first quarter were affordable to families earning the area’s median income of $97,500.

Top five least affordable major housing markets—all located in California:

1. Los Angeles-Long Beach-Glendale

2. Anaheim-Santa Ana-Irvine

3. San Diego-Chula Vista-Carlsbad

4. San Francisco-San MateoRedwood City

5. San Jose-Sunnyvale-Santa Clara

The top five least affordable small housing markets were also in the Golden State. At the very bottom of the affordability chart was Napa, Calif., where 6.6% of all new and existing homes sold in the first quarter were affordable to families earning the area’s median income of $129,600.

Top five least affordable small housing markets—all located in California:

1. Napa

2. Salinas

3. San Luis Obispo-Paso Robles

4. Santa Maria-Santa Barbara

5. Merced Please

OSHA Penalty Amounts Soar Due to Inflation; New Fines Effective Today

Violations of safety rules on jobsites are now more expensive as the Labor Department late last week announced its annual cost-of-living adjustments to OSHA civil penalties for 2023. The new penalty amounts are effective Tuesday, Jan. 17.

OSHA’s maximum penalties for violations will increase from $14,502 per violation to $15,625 per violation. The maximum penalty for willful or repeated violations will increase from $145,027 per violation to $156,259 per violation.

Visit the OSHA Penalties page and read the final rule for more information.

The safety of residential construction workers is a top priority of NAHB and should be the top priority of every builder, remodeler and contractor. The most common types of construction site injuries are fall injuries. This aligns with OSHA’s most-cited violations on jobsites.

Top OSHA violations for fiscal year 2022:

1. Fall Protection – General Requirements: 5,260 violations

2. Hazard Communication (Chemicals): 2,424

3. Respiratory Protection: 2,185

4. Ladders: 2,143

5. Scaffolding: 2,058

6. Lockout/Tagout: 1,977

7. Powered Industrial Trucks: 1,749

8. Fall Protection – Training Requirements: 1,556

9. Personal Protective and Lifesaving Equipment – Eye and Face Protection: 1,401

10. Machine Guarding: 1,370

Protect your workers and your bottom line with free safety resources from NAHB.