Conflicting research has many housing professionals—and house hunters—wondering if the nation has reached an affordability crisis or not. There are a few factors that influence why reputable sources are coming up with such different perspectives. Is there an affordability crisis? First American Financial Corp says no. A recent research summary posits that while home prices and mortgage rates have been increasing, the nation isn’t near crisis mode. CoreLogic’s Home Price Index reports that home prices increased 7 percent year-over-year. The Primary Mortgage Market Survey issued by Freddie Mac shows the recent mortgage rate has increase to its highest since 2013. First American Financial Corp suggests that the nation is not in crisis mode because while home prices and mortgages rates have increased, incomes have also increased. Most states have reached income levels that exceed their 2007 peak. Many incomes are higher than they’ve been in more than a decade. The organization’s conclusion: there is no crisis, just a casual decrease in affordability. Additional factors It’s not just home prices, mortgage rates, and incomes we must consider. Non-housing cost of living increases play a practical role in housing affordability for households. These costs have been rising for most of the nation, with six cities experiencing the steepest increases. GOBankingRates lists Atlanta; Denver; Eugene, Ore.; Nashville; Portland; and Seattle as cities with the highest spikes in non-housing cost of living. Healthcare, groceries, transportation and utilities are among the expenses that consume residents resources and contribute to the inability to afford housing. While incomes have increased over the years, housing costs have increased faster. The rising cost of non-housing expenses make affordability more challenging. An earner spends 29.1 percent of their income on a median-priced home. The established recommendation for affordability is 30 percent of income, which brings the average wage earner...

Just when we thought the housing market was stabilizing, the Mortgage Foreclosure Debt Forgiveness Act ended. To date, the act has not been extended, which could lead to a few notable changes in both the single-family and multi-family markets. Before 2007, a mortgage owner could receive a break on their loan as long as that forgiven debt was taxed. When the Mortgage Foreclosure Debt Forgiveness Act passed that year, it eliminated the tax on forgiven debt, allowing more cash to stay within the household. Homeowners were able to get back on their feet and into a rental—or even another house–more quickly. In January 2014, the Mortgage Foreclosure Debt Forgiveness Act came to an end.  According to the National Association of Realtors, reinstating tax on forgiven debts may affect many of nearly 10 million Americans with underwater properties; currently, 14.5 percent of homes in the US are still in negative equity, reports the National Association of Attorneys General. Homeowners with underwater properties will be dissuaded from short sales and other measures of foreclosure prevention since they often don’t have the means to pay the difference between the mortgage cost and the home’s current value. They likely unable to pay high taxes on forgiven debts, either. Homeowners may still qualify for an insolvency exclusion but it’s a tedious route The result: more foreclosures. RealtyTrac reports that more than 1.2 million properties throughout the nation are in some stage of foreclosure. States such as Delaware, Maryland, and Connecticut were inundated with distressed properties during the recession and they will continue to see high numbers of bank repossessions. With fewer assistance programs in place, these homeowners will continue to enter the rental market in numbers higher than previously expected. The continued flow of tenants may keep vacancy rates...