Massive Gaps between Most/Least Affordable Areas Despite Unchanged Average

About two-thirds of the homes soldrnduring the fourth quarter of 2013 are considered “affordable” according to the NationalrnAssociation of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI).  NAHB said on Thursday that the HOI heldrnsteady in the fourth quarter at 64.7 percent, virtually the same as the 64.5rnpercent recorded in the previous quarter. </p

The HOI is based on the number of homernsold during the quarter that would be affordable to families earning the medianrnincome of $64,400 assuming a 20 percent down payment.  The national median home price dipped to $205,000rnin the fourth quarter from $211,000 in the third, while average mortgagerninterest rates rose from 4.45 percent to 4.54 percent.</p

“Housing affordability isrnstabilizing at a time when pent-up demand and ongoing job growth are helpingrnhousing markets across the nation to gradually strengthen,” said NAHBrnChairman Kevin Kelly, a home builder and developer from Wilmington, Del.rn “While this bodes well for housing in 2014, builders continue tornface challenges, including tight credit for home buyers, inaccurate appraisals,rnand a shortage of workers and buildable lots.”</p

The most affordable major housing marketrnwas Youngstown-Warren-Boardman, Ohio-Pennsylvania where 89.4 percent of homesrnwere affordable to those with the area’s median income of $53,900.  The least affordable major market for thernfifth consecutive quarter was San Francisco-San Mateo-Redwood City.  There only 14.1 percent of new and existingrnhomes sold were affordable to those with the local median income of $101,200. <br /<br /Kokomo, Indiana was the most affordable smaller market; 96.3 percent of homesrnsold in the fourth quarter were affordable to those earning the median incomernof $60,100.  All of the five leastrnaffordable small housing markets were in California with the least affordablernbeing Santa Cruz-Watsonville.  There 18.6rnpercent of all new and existing homes sold during the quarter were affordablernto families earning the area’s median income of $73,800.

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