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Housing Affordability Remains at Near-Record Levels
Bolstered by affordable interest rates and low prices, national housing affordability on the NAHB/Wells Fargo Housing Opportunity Index (HOI) continued in this year’s second quarter to hover near its highest level since the series began 18 years ago.
The HOI showed that 72.3% of all new and existing homes sold in the second quarter of 2009 were affordable to families earning the national median income of $64,000, down only slightly from the record-high 72.5% during the previous quarter and up from 55.0% during the second quarter of 2008.
“The increase in affordability — along with the $8,000 federal tax credit for home buyers — is stimulating demand, particularly among young, first-time buyers,” said NAHB Chairman Joe Robson. “But to keep the recent upturn in home sales going into next year, Congress will need to extend the tax credit for another year and make it available to all buyers in an effort to encourage activity in the trade-up market.”
Robson noted that the tax credit, which expires on Nov. 30, is currently limited to just buyers purchasing their first home.
Indianapolis, once again, was the most affordable major housing market in the country during the second quarter. Almost 95% of all homes sold were affordable to households earning the area’s median family income of $68,100. Indianapolis has now topped the affordability list for 16 consecutive quarters.
Rounding out the list of the five most affordable major metro housing markets were: Youngstown-Warren-Boardman, Ohio-Pa.; Detroit-Livonia-Dearborn, Mich.; Dayton, Ohio; and Grand Rapids-Wyoming, Mich.
Several smaller housing markets posted even higher affordability scores than Indianapolis, with Kokomo, Ind. outscoring them all. There, almost 98% of homes sold during the second quarter of 2009 were affordable to median-income earners.
Other small housing markets ahead of Indianapolis on the affordability scale included: Lansing-East Lansing, Mich.; Mansfield, Ohio; Elkhart-Goshen, Ind.; Lima, Ohio; and Bay City, Mich.
New York-White Plains-Wayne, N.Y.-N.J. — where just over 21% of all homes sold during the April-to-June period were affordable to those earning the median income of $64,800 — was once again the nation’s least affordable major housing market. This was the New York metro area’s fifth consecutive appearance at the bottom of the list.
Other major metro areas at the bottom of the affordability chart included: San Francisco; Honolulu; Los Angeles-Long Beach-Glendale, Calif.; and Santa Ana-Anaheim-Irvine, Calif.
Among smaller metro areas, San Luis Obispo-Paso Robles, Calif. was the least affordable market, followed by Ocean City, N.J.; Santa Cruz-Watsonville, Calif.; Flagstaff, Ariz.; and Santa Barbara-Santa Maria-Goleta, Calif., respectively.
Visit www.nahb.org/hoi or tables, historic data and details.
 Tax Credit Web Site Looks at Opportunity of a Lifetime
Builders and other industry professionals can help spur home sales by referring prospective first-time home buyers to www.federalhousingtaxcredit.com. The NAHB Web site provides detailed information on the $8,000 federal tax credit for first-time home buyers included in the economic stimulus legislation signed into law by President Obama.
Consumers can use the Web site to find information on the tax credit — including a detailed question and answer section. It also includes information about other housing-related and small business measures in the legislation and a number of home-buying resources for consumers.
Spanish Version Also Available Online
A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.
Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.
 Want to Know the Housing Starts Through 2017?
Find out in HousingEconomics.com's Long-Term Forecast.
Subscribe and get downloadable Excel tables that feature the housing starts forecast, gross domestic product (GDP), demographics and more.
To learn more, visit www.housingeconomics.com.
 Plan to Attend Construction Forecast Conference
Plan to attend or watch the 2009 Fall NAHB Construction Forecast Conference & Webcast on Oct. 21 in Washington, D.C. to get the latest facts, insights and analysis of the housing industry.
Panels of nationally recognized experts at the day-long conference will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys.
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