Each quarter, the National Association of Home Builders (NAHB) and Wells Fargo Mortgage compile housing affordability data for each major and small market in the United States. On February 8, 2022, the data was released for the 4th quarter 2021. The Columbia SC market data reflects a decline in housing affordability in our market. The median home price (new and existing) for the 4th quarter was $230K, and the median annual household income was $72K. When the numbers are crunched, only 77.2% of folks with a median income can afford a median-priced home. This is down almost 10% from the previous quarter. It is also reflected in the number of units closed, which was 2759 homes sold and closed as compared to 3389 units sold and closed in 3rd quarter 2021, where a median home at $210K, median income was at $72K and the housing affordability at 85.6%.
What does this mean for home sales in the future? Obviously, home prices will flatten or dip with less affordability among buyers. Interest rates rose along with home prices. The average mortgage rate in 4th quarter stood at 3.16% where it was 2.95% in 3rd quarter 2021. Today, mortgage rates are averaging 3.5%, putting more pressure on housing prices and affordability.
How does Columbia stand in ranking compared to other South Carolina markets? In 4th quarter 2021, Charleston/North Charleston’s median home price was $355K with a median annual household income of $82.1K and housing affordability standing at just 61.2% of average homebuyers able to afford a median-priced home. Greenville/Anderson/Mauldin’s market had a median-priced home at $287K, median household income at $77.2K, and housing affordability at 72%. Columbia has a better housing affordability ranking than Charleston or Greenville, although it should be 100%. More affordable housing is needed across the state of South Carolina.
You can read more about this data on the NAHB website here.