First-Time Home Buyers Face Affordability Issues in Albuquerque

The prices of starter homes in the metro-Albuquerque market have soared 57 percent since 2003, making it more difficult for first time home buyers.

David Murphy, publisher of SalesTraq, an online housing database that focuses on new home prices for this region, reports that starting home prices in Albuquerque have risen from under $80,000 to $112,000 in three years, while climbing to $160,000 in Rio Rancho and $119,000 in Los Lunas.

These higher prices are putting a drag on the overall market because they bar entry to many first time buyers and those seeking a New Mexico mortgage.

“How will the market cater to lower wage earners? The lion’s share of resale homes has closed between the $100,000-$200,000 mark consistently for the last several years while both the average and median home price have soared well beyond this.

This is another reason why the inventory has been so high, it’s become expensive,” Murphy says. “Let’s hope the forecasts of a bright economic future for Albuquerque are correct.”

The current average new home base price in the Albuquerque housing market is $257,485, an all-time high as developers are building larger homes with richer architectural features. They are paying higher land costs and building materials have soared in the past three years.

Of three new subdvisions opening this January, none have low starting prices.

Jubilee at Huning Ranch is priced between $189,000 and $339,000, Stormcloud@The Petroglyphs starts at $208,000 while Autumn View begins at $200,000. This doesn’t bode well for affordability. Until prices come down, home mortgage loan activity will remain slow.