Housing affordability climbs to highest level in four years
Decreasing home prices and low-level interest rates have produced the highest number of potential home buyers nationwide who can afford to buy new and existing homes in more than four years, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI).
In the third quarter, 56.1 percent of new and existing homes that were sold were affordable to families earning the national median income of $61,500, according to the HOI. This compares to 40.4 percent of families who could afford homes at the peak of the housing boom.
“If there is a silver lining to this crisis, it would be that some housing markets have become more affordable with a larger inventory to choose from,” said NAHB chairman Sandy Dunn, a home builder from Point Pleasant, W.Va. “But this is undeniably a crisis, and Congress needs to act on housing stimulus to get the market moving again.”
The two most affordable housing markets in the country during the third quarter were Indianapolis and Youngstown, Ohio. In both markets, 91.0 percent of homes sold were affordable to families earning the areas’ median household incomes of $65,100 in Indianapolis and $52,000 in Youngstown.
Also near the top Grand Rapids-Wyoming, Mich.; Warren-Troy-Farmington Hills, Mich.; and Detroit-Livonia-Dearborn, Mich.
Springfield, Ohio, a smaller metro market, outranked all others -- 92.9 percent of all homes sold in the third quarter were affordable to families earning that area’s median household income of $54,500.
New York-White Plains-Wayne, N.Y.-N.J., was the least affordable housing market for the second consecutive quarter. In New York, 10.6 percent of new and existing homes sold during the third quarter were affordable to those earning the area’s median family income of $63,000.
Other metro areas at the bottom of the list included San Francisco-San Mateo-Redwood City, Calif.; Nassau-Suffolk, N.Y.; Los Angeles-Long Beach-Glendale, Calif.; and Miami-Miami Beach- Kendall, Fla.