|
Housing Affordability Slumps to Record Low in Third Quarter
Indianapolis is the nation’s most affordable housing market among major metropolitan areas with populations over 500,000, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI) for this year’s third quarter.
Other top major metros for housing affordability were Youngstown-Warren and Boardman, Ohio-Pa.; Detroit-Litonia-Dearborn, Mich.; Buffalo-Niagara Falls, N.Y. and Oklahoma City, Okla., in that order.
Challenged by steadily rising home prices, overall housing affordability across the country fell for the third consecutive quarter to its lowest level since the HOI was first reported in 1992, dipping 2.7 points to 43.2. This means that just over 43% of all new and existing homes sold in the country during the third quarter were affordable to families with a median income. The decline was mostly attributable to a 5% increase in the average price of homes sold during the three-month period.
“Strong house-price performance is the double-edged sword that has simultaneously attracted and discouraged new home buyers,” said NAHB President Dave Wilson.
Although mortgage interest rates have been on the rise since September, the average weighted interest rate for fixed- and adjustable-rate mortgages used to calculate third-quarter affordability held at 5.84%, just above 5.82% during the April-June period.
In Indianapolis, 89.7% of new and existing homes sold in the third quarter were affordable to families earning the area’s median income of $64,000. The median price of homes sold in Indianapolis during that time was $125,000.
By comparison, in the nation’s least affordable major housing market of Los Angeles-Long Beach-Glendale, Calif., a mere 2.4% of all homes sold were affordable to those earning the median income of $54,500 and the median sales price was $495,000.
California once again dominated the HOI rankings for the least affordable major metropolitan areas. Right behind Los Angeles were Santa Ana-Anaheim-Irvine; San Diego-Carlsbad-San Marcos and Stockton. Among the top five least affordable major housing markets, New York-White Plains-Wayne, N.Y.-N.J. was the only one not located in California.
In metro areas with populations of less than 500,000, Mansfield, Ohio was the most affordable, followed by Cumberland, Md.; Lima, Ohio; Davenport-Moline-Rock Island, Iowa-Ill.; and Lansing-East Lansing, Mich., respectively. At the bottom of the list were the California cities of Merced, Salinas, Santa Barbara-Santa Maria, Modesto and Santa Cruz-Watsonville.
 Where Are the Top 100 Metropolitan Areas for 2006?
“HousingEconomics Online,” the online publication from the NAHB Economics Group, is your single source for market analysis, forecasts, housing statistics and more. In-depth analysis, detailed Excel tables and overviews are available for all metro forecasts. To learn more or subscribe to “HousingEconomics Online”, visit www.housingeconomics.com.
|
