Feb 21 2008
Indianapolis, Ind., maintained its standing as the most affordable major U.S. housing market for a 10th consecutive time in the fourth quarter of 2007, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), released today. Nationwide, housing affordability increased for the quarter and on a year-over-year basis, rising to the highest level since the first quarter of 2005.
"Today's HOI reading indicates that 46.6 percent of all new and existing homes that were sold during the fourth quarter were affordable to families earning the national median income of $59,000," said NAHB President Sandy Dunn, a builder from Point Pleasant, W.Va.. "With mortgage rates returning to near the record low levels of a few years ago, more potential home buyers across the country are finding that they now can buy the home of their dreams."
The HOI indicates that the national weighted interest rate on fixed and adjustable-rate mortgages - a key component in calculating the HOI - was 6.42 percent in the fourth quarter, compared to 6.73 percent in the third quarter.
In the nation's most affordable major housing market of Indianapolis, 89.5 percent of homes sold in the fourth quarter were affordable to families earning the area's median household income of $63,800. Also near the top of the list for affordable major metros this time around were Youngstown-Warren-Boardman, Ohio-Pa.; Detroit-Livonia-Dearborn, Mich.; Toledo, Ohio; and Grand Rapids-Wyoming, Mich., in that order.
One smaller metro market (fewer than 500,000 people) outranked all others in terms of housing affordability during the fourth quarter. This was Kokomo, Ind., where 92.9 percent of all homes sold in the period were affordable to families earning that area's median household income of $59,700.
Los Angeles-Long Beach-Glendale, Calif., maintained its long-held standing as the nation's least-affordable major housing market, now for 13 consecutive quarters. There, just 6.2 percent of new and existing homes sold during the fourth quarter were affordable to those earning the area's median family income of $61,700.
Other major metros at the bottom of the housing affordability chart included San Francisco-San Mateo-Redwood City, Calif.; Santa Ana-Anaheim-Irvine, Calif.; New York-White Plains-Wayne, N.Y.-N.J.; and Oxnard-Thousand Oaks-Ventura, Calif.; in that order.
Among metro areas smaller than 500,000 people, every entry at the bottom of the affordability chart was located in California, starting with Napa as the least affordable and followed by Salinas, Merced, San Luis Obispo-Paso Robles, and Santa Barbara-Santa Maria-Goleta, Calif., respectively.