Housing affordability managed to slightly improve in the first quarter of 2017, overcoming rising interest rates and other market headwinds, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.

The report attributed the boost in affordability to rising wages and moderating home prices that helped offset a rise in mortgage interest rates.

According to the latest interest rate report from Freddie Mac, the 30-year fixed rate mortgage now sits a little above 4.05%, which is nearly half a percentage point above where it sat mid-2016.

NAHB Chairman Granger MacDonald, a homebuilder and developer from Kerrville, Texas, explained that builders are reporting confidence and solid traffic in many markets across the nation even as they continue to grapple with nagging headwinds

Market headwinds, he explained, include regulatory constraints, trade barriers on Canadian softwood lumber, and persistent shortages of lots and labor, which are slowing the pace of the housing recovery.

According to the report, 60.3% of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $68,000.

This is up from the 59.9% of homes sold that were affordable to median-income earners in the fourth quarter.

In addition, the national median home price decreased to $245,000 in the first quarter from $250,000 in the final quarter of 2016.

"Ongoing job growth continues to fuel demand for housing, while wage growth is helping to offset the effects of rising mortgage rates and keep home prices affordable," said NAHB Chief Economist Robert Dietz. "NAHB anticipates that housing will continue on a gradual, upward path throughout the year."