While the US market has been on many investors' radars, it seems there may still be growth in the pipeline with affordability and supply/demand balances starting to weigh up, according to new statistics.
This year’s first quarter saw housing affordability in the US still at a high point, noted the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI).
Of the new and existing homes sold between the beginning of January and the end of March 2013, almost three quarters (73.7 per cent) were affordable to those earning the US median outcome. This was, however, down from 74.9 per cent in the final quarter of 2012.
“Thanks to very favourable mortgage rates and prices, housing affordability has remained quite high over the past four years,” said NAHB chairman Rick Judson.
“The HOI has not slipped below 70 since the end of 2008.”
Despite this, supply might be limited as rising costs for building materials and labour are making it more expensive to construct new homes. This could place pressure on prices.
“While builders today are considerably more optimistic than they have been at earlier stages of the housing recovery, numerous challenges are slowing their ability to get new projects underway,” Mr Judson noted in regards to slowing construction activity.
“In particular, limited access to construction credit, tough qualification standards for mortgage borrowers and rising costs for building materials, developable lots and labour are impacting the pace of construction activity.”