Rates, Declining Home Prices Improved Affordability in Q4

Housing affordability grew slightly in the fourth quarter ofrn2014 according to the National Association of Home Builders (NAHB)/Wells FargornHousing Opportunity Index (HOI) released today.  NAHB said that the increase was due to interestrnrates which declined from 4.35 percent to 4.29 percent during the quarter andrnhome prices which decreased in some markets and brought the national medianrndown to $215,000 from the third quarter median of $220,800. </p

Nationwide the HOI shows that 62.8 percent of new andrnexisting homes sold during the fourth quarter were affordable to familiesrnearning the U.S. median income of $63,900. rnIn the third quarter 61.8 percent of homes sold met that affordabilityrncriteria.</p

NAHB Chairman Tom Woods said, “This upturn in affordability for the finalrnquarter of 2014 is a positive development and is in line with what we arernhearing from builders in the field that more prospective buyers are starting tornmove forward in the marketplace.” <br /<br /Syracuse was the nation's most affordable major housing market with 92.8rnpercent of new and existing fourth quarter home sales deemed affordable tornfamilies earning the area’s median income of $67,700.  Other major affordable markets were Akron andrnDayton, Ohio; Harrisburg-Carlisle and Scranton-Wilkes-Barre, Pennsylvania. </p<pAmong smaller markets the most affordable was Cumberland, Maryland wherern96.2 percent of homes sold during the fourth quarter were affordable tornfamilies earning the area's median income of $54,100. Other smaller housingrnmarkets at the top of the index include Kokomo, Indiana; Wheeling, WestrnVirginia; Binghamton, New York; and Salisbury, Maryland. <br /<br /Almost all of the least affordable markets, large and small, were located inrnthe Golden State.  For a ninthrnconsecutive quarter, San Francisco-San Mateo-Redwood City was the nation’srnleast affordable major housing market.  Justrn11.1 percent of homes sold there in the fourth quarter were affordable tornfamilies earning the area’s median income of $100,400.<br /<br /Other major metros in the least affordable category were Los Angeles-LongrnBeach-Glendale, Santa Ana-Anaheim-Irvine and San Jose-Sunnyvale-Santa Clara.  The only non-California market named wasrnnumber five, New York-White Plains-Wayne.<br /<br /The least affordable small market was Napa, where 12 percent of all new andrnexisting homes sold were affordable to families earning the area’s medianrnincome of $70,300. The remaining top five small markets were SantarnCruz-Watsonville, Salinas, Santa Rosa-Petaluma, and San Luis Obispo-Paso Robles.

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