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Indianapolis Remains Most Affordable Housing Market
Indianapolis has remained the most affordable major U.S. housing market for a solid year and a half, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI), with the release last week of results for the final quarter of 2006.
Nationwide, housing affordability edged slightly upward during the quarter due to a noticeable decline in the average mortgage rate and a marginal downshift in the median price of all homes sold.
“The latest HOI reading indicates that 41.6% of new and existing homes that were sold during the fourth quarter of 2006 were affordable to families earning the national median income of $59,600,” said NAHB President Brian Catalde. “This is slightly better than the 40.4% of homes that were affordable to median-income earners in the third quarter and mostly due to more favorable mortgage rates near the end of the year.”
The HOI showed a national weighted interest rate on fixed- and adjustable-rate mortgages of 6.52% in the fourth quarter, compared to 6.77% in the third quarter.
In the nation’s most affordable major housing market of Indianapolis, 89% of homes sold in the fourth quarter were affordable to families earning the area’s median household income of $65,100. The median sales price of all homes sold in Indianapolis during that time was $113,000, which is down from the $122,000 median sales price in the previous quarter.
Also near the top of the list for affordable major metros this time around were Youngstown-Warren-Boardman, Ohio-Pa.; Detroit-Livonia-Dearborn, Mich.; Toledo, Ohio; and Buffalo-Niagara Falls, N.Y., in that order.
Four smaller metro markets outranked all others in terms of housing affordability during the fourth quarter: Springfield, Ohio was followed by Davenport-Moline-Rock Island, Iowa.-Ill.; Bay City, Mich.; and Mansfield, Ohio, respectively. Also, the small housing market of Canton-Massillon, Ohio, tied with Indianapolis on the affordability scale.
Also maintaining its previous standing on the HOI was Los Angeles-Long Beach-Glendale, Calif., which was the nation’s least-affordable major housing market for a ninth consecutive quarter. There, just 2% of new and existing homes sold during the fourth quarter were affordable to those earning the area’s median family income of $56,200. The median sales price of all homes sold in the area during the period was $525,000.
Other major metros at the bottom of the housing affordability chart included Santa Ana-Anaheim-Irvine, Calif.; San Diego-Carlsbad-San Marcos, Calif.; New York-White Plains-Wayne, N.Y.-N.J.; and Modesto, Calif., 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 Salinas as the least affordable and followed by Napa, Merced, Santa Cruz-Watsonville and Santa Barbara-Santa Maria, Calif., respectively.
 Want to Know the Housing Starts Through 2015?
Find out in HousingEconomics.com’s Long-Term Forecast.
HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more.
To learn more, visit www.housingeconomics.com.
 NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market
With the current cooling of the nation’s housing market expected to persist into the middle of the year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.
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