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Bolstered by favorable mortgage rates and low house prices, housing in the U.S. remained at highly affordable levels during this year’s first quarter, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI).
Released on May 20, the first-quarter index found housing affordability hovering for the fifth consecutive quarter near its highest level since the series was first compiled 19 years ago.
The HOI showed that 72.2% of all new and existing homes sold in the first quarter of 2010 were affordable to families earning the national median income of $63,800, slightly higher than the previous quarter and near the record-high 72.5% set during the first quarter a year ago.
"The latest report is very encouraging because it indicates that homeownership continues its more than year-long trend of remaining within the reach of more households than it has for almost two decades," said NAHB Chairman Bob Jones. "With interest rates remaining at low levels, companies starting to hire new employees and the economy beginning to rebound, this should encourage more home buyers to enter the market and help further stabilize housing and the economy."
Indianapolis-Carmel and Youngstown-Warren-Boardman, Ohio-Pa., were the most affordable major housing markets in the country. In Indianapolis, which has held top ranking for nearly five years, almost 95% of all homes sold were affordable to households earning the area's median family income of $68,700. In Youngstown, the same percentage of homes was affordable to households earning a median $53,500.
Also near the top of the list of the most affordable major metro housing markets were Syracuse, N.Y.; Dayton, Ohio; and Grand Rapids-Wyoming, Mich.
Five smaller housing markets posted even higher affordability scores than Indianapolis and Youngstown. Among them, Bay City, Mich. — where 98.7% of homes sold during the first quarter were affordable to median-income earners — was the most affordable market in the country. Other smaller housing markets near the top of the index included Kokomo, Ind.; Davenport-Moline-Rock Island, Iowa-Ill.; Sandusky, Ohio; and Elkhart-Goshen, Ind., respectively.
For the eighth consecutive quarter, New York-White Plains-Wayne, N.Y.-N.J., was the nation’s least affordable major housing market, with slightly less than 21% of all homes sold there during the first quarter affordable to those earning the area's median income of $65,600.
The other major metro areas at the bottom of the affordability scale included San Francisco; Honolulu; Santa Ana-Anaheim-Irvine, Calif.; and Los Angeles-Long Beach-Redwood City, Calif.
San Luis Obispo-Paso Robles, Calif., was the least affordable of the smaller metro housing markets in the country during the first quarter. Others at the bottom of the chart included Ocean City, N.J; Santa Cruz-Watsonville, Calif.; Napa, Calif.; and Flagstaff, Ariz.