While rising home prices are a boon to the greater economy, they are also starting to squeeze the record affordability that was drawing so many home buyers back into the market, CNBC reported. The National Association of Realtors’ Affordability Index shows that housing affordability is now dropping, as asking prices have begun to rise faster than rents, a trend that could hurt the fledgling housing recovery.
“The price recovery is strongest in the largest metros, and price gains have now surpassed rent gains in the largest 25 rental markets. However, price gains are starting to waver in smaller markets,” Trulia’s Jed Kolko, said. [more]