Dip in Housing Affordability Seen as Positive by NAHB

Housing affordability dipped slightlyrnduring the second quarter according to the National Association of HomernBuilders (NAHB)/Wells Fargo Housing Opportunity Index (HOI), released today.  The data shows that 73.8 percent of all newrnand existing homes sold in the second quarter were affordable to familiesrnearning the national median income of $65,000, down from a record high 77.5rnpercent of homes that were affordable to median-income earners as of the firstrnquarter.</p

This is not necessarily bad news as therndecrease in affordability is largely attributable to rising home prices inrnmetropolitan areas across the country. rnNinety-two percent of the MSAs covered by the NAHB survey saw anrnincrease in median home prices between the first and second quarters of thernyear.  </p

NAHB Chairman Barry Rutenberg said, “While interest rates and overallrnhousing affordability remain very favorable on a historic basis, the decline inrnthe latest HOI is a positive development because it is another signal that thernhousing recovery is starting to take root, and it lends needed confidence tornprospective buyers and sellers who have been reluctant to move forward in therncurrent marketplace.”</p

The most affordable major housing market in this year’s second quarter wasrnYoungstown-Warren-Boardman, Ohio-Pennsylvania where 93.4 percent of homes soldrnduring the period were affordable to households earning the area’s medianrnfamily income of $55,700.  Also rankingrnamong the most affordable major housing markets in respective order werernDayton, Ohio; Buffalo-Niagara Falls, New York; Indianapolis-Carmel, Indiana;rnand Modesto, California.</p

White Plains and New York City -Wayne, New Jersey remained the leastrnaffordable major housing market in the country for a 17th consecutive quarter,rnwith just 29.4 percent of homes sold there being affordable to families earningrnthe area’s median income of $68,300.  Other relatively unaffordable areas were SanrnFrancisco-San Mateo-Redwood City; Bridgeport-Stamford-Norwalk, Connecticut;rnSanta Ana-Anaheim-Irvine, California; and Los Angeles-Long Beach-Glendale.</p

The HOI computes affordability using an area’s median income during arnspecific quarter, the price of new and existing homes, and mortgage financingrnconditions including interest rates on fixed-and adjustable rate loans.

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