RISMEDIA, Nov. 29, 2007-Indianapolis, Ind. maintained its standing as the most affordable major U.S. housing market for a ninth consecutive time in the third quarter of 2007, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), released this week.
Meanwhile, nationwide housing affordability rose on a year-over-year basis but was down slightly for the quarter due to higher mortgage rates.
“Today’s HOI reading indicates that 42 percent of all new and existing homes that were sold during the third quarter were affordable to families earning the national median income of $59,000,” said NAHB President Brian Catalde, a home builder from El Segundo, Calif. “This reflects a slight improvement in affordability from a year ago, when only 40.4 percent of homes were within reach of median income-earners, but is just below the 43.1 percent of homes that were affordable to median income-earners in this year’s second quarter.”
The HOI indicates that the national weighted interest rate on fixed and adjustable-rate mortgages – a key component in calculating the HOI – was 6.73% in the third quarter, compared to 6.44% in the second quarter.
In the nation’s most affordable major housing market of Indianapolis, 87.5% of homes sold in the third 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 Detroit-Livonia-Dearborn, Mich.; Youngstown-Warren-Boardman, Ohio-Pa.; Scranton-Wilkes-Barre, Pa.; 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 third quarter. This was Kokomo, Ind., where 90.5% of all homes sold in the period were affordable to families earning that area’s median household income of $59,700.
Also maintaining its long-held standing on the HOI was Los Angeles-Long Beach-Glendale, Calif., which has now been the nation’s least-affordable major housing market for a dozen consecutive quarters. There, just 3.7% of new and existing homes sold during the third 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 Santa Ana-Anaheim-Irvine, Calif.; San Francisco-San Mateo-Redwood City, Calif.; New York-White Plains-Wayne, N.Y.-N.J.; and Nassau-Suffolk, N.Y., 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, San Luis Obispo-Paso Robles, Santa Cruz-Watsonville, and Merced, Calif., respectively.
For more information, visit www.nahb.org/hoi.