Home Affordability at Record Levels

While housing is more affordable than ever for mostrnU.S. families, the lack of financing available to them continues to constrainrnprospective homebuyers according to the most recent National Association ofrnHome Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI) released onrnThursday.   The Index indicates that 75.9rnpercent of all new and existing homes sold in the fourth quarter were withinrnthe financial reach of families earning the national median income ofrn$64,200.  This is the highest number forrnthe affordability index in its 20 year history.</p

HOI measures the percentage of homes sold in a givenrnarea that could be purchased by households earning that area’s median income atrncurrent mortgage interest rates and assuming a 20 percent down payment.  <br /<br /"While today's report indicates that homeownership is within reach of morernhouseholds than it has been for more than two decades, overly restrictivernlending conditions confronting home buyers and builders remain significantrnobstacles to many potential homes sales, even with interest rates atrnhistorically low levels," said Barry Rutenberg, chairman of NAHB. </p

The metropolitan area encompassing Youngstown Ohiornand Boardman, Pennsylvania was the most affordable major housing market in therncountry with 95.1 percent of all homes sold during the quarter affordable underrnthe NAHB definition.  The area’s medianrnincome is $54,900.  Other major MSAsrnranking at the top in affordability are Lakeland-Winter Haven, Florida;rnModesto, California; Harrisburg-Carlisle, Pennsylvania; and Toledo, Ohio.<br /<br /The most affordable small housing market was Kokomo, Indiana where 99.2 percentrnof homes were affordable to families earning the median income of $59,100.rnOther smaller housing markets at the top of the index included Fairbanks, Alaska;rnCumberland, Maryland; Lima, Ohio; and Rockford, Illinois.<br /<br /Only 29.0 percent of homes in the New York-White Plain area were affordable tornthose with the area's median income of $67,400. rnThis was the 15^th consecutive quarter that this MSA rankedrnlast in affordability.  Other major metrornarea at the bottom of the affordability index included Honolulu and threernCalifornia MSAs, San Francisco-San Mateo-Redwood City; Santa Ana-Anaheim-Irvine;rnand Los Angeles-Long Beach-Glendale. </p

The least affordable small market was Ocean City,rnNew Jersey where, with a median income of $70,100 only 47.5 percent of homesrnwere deemed affordable.  It was followedrnby Laredo, Texas, San Luis Obispo-Paso Robles, and Santa Cruz-Watsonville,rnCalifornia; and Brownsville-Harlingen, Texas.

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