Small increases in home prices are pushing larger numbers of potential buyers out of the market, according to a new survey released Monday.
Each $1,000 increase in the cost of a new median-priced home price forces 206,000 prospective buyers out of the marketplace, the National Association of Home Builders (NAHB) said in the report.
{mosads}The analysis underscores concerns about what homebuilders say is a growing number of regulations that are pushing up prices.
The survey found that every $833 increase in fees paid during the construction process — such as the price of a construction permit or an impact fee — adds an additional $1,000 to the final price of the home.
“This study highlights the real effects that building regulations have on housing affordability,” said NAHB Chairman Kevin Kelly, a homebuilder and developer from Wilmington, Del.
“Local, state and federal government officials need to know that higher regulatory costs have real consequences for working American families.”
The number of households affected varies across states and metro areas and largely depends on population, income distribution and new home prices, according to the report that contains results for more than 300 metro areas.
Among states, a $1,000 increase affects 313 in Wyoming, the lowest of all states, to a high of 18,250 in Texas.
Measured by local metro areas, the number of households who would be priced out of the market based on a $1,000 increase range from a low of 19 in Napa, Calif., to a high of 5,742 in the New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa. area.
A look at affordable metro areas, where roughly 50 percent or more of households can afford new homes, the effects are typically large and can often disqualify thousands of new homebuyers, as in the case of Houston-Sugar Land-Baytown, Texas (4,234); Atlanta-Sandy Springs-Marietta, Ga. (4,135); and Las Vegas-Paradise, Nev. (2,044).