The Official Online Weekly Newspaper of NAHB
Bolstered by favorable interest rates and low house prices, housing affordability registered by the NAHB/Wells Fargo Housing Opportunity Index in this year’s second quarter remained near its highest level nationwide for the sixth consecutive quarter since the series was first compiled nearly two decades ago.
Released on Aug. 19, the latest HOI indicated that 72.3% of all new and existing homes sold in the second quarter were affordable to families earning the national median income of $64,400. Affordability was slightly higher than in the first quarter and came close to equaling the record-high 72.5% set during the first quarter of 2009.
Until 2009, the HOI rarely topped 67% and never reached 70%.
“Homeownership is within reach of more households than it has been for almost a generation,” said NAHB Chairman Bob Jones. “Interest rates continue to hover at historic low levels, the economy is beginning to rebound and with house prices starting to stabilize, conditions are beginning to draw home buyers back into the market, which is a positive step on the path to recovery.”
Syracuse, N.Y., was the most affordable major housing market in the country, edging out Indianapolis-Carmel, Ind., which had held the top ranking for nearly five years. In Syracuse, 97.2% of all homes sold were affordable to households earning the area’s median family income of $64,300.
Also at the top of the list of the most affordable major metro housing markets were Detroit-Livonia-Dearborn, Mich.; Youngstown-Warren-Boardman, Ohio-Pa.; and Buffalo-Niagara Falls, N.Y., respectively.
Among smaller housing markets, the most affordable was Springfield, Ohio, where 96.6% of homes sold during the second quarter were affordable to families earning a median-income of $56,800. Other smaller housing markets at the top of the index included Mansfield, Ohio; Bay City, Mich.; Monroe, Mich.; and Lansing-East Lansing, Mich., respectively.
Second-quarter HOI results found New York-White Plains-Wayne, N.Y.-N.J., continuing for the ninth consecutive quarter to lead the nation as its least affordable major housing market — with 19.9% of all homes sold affordable to those earning the area median income of $65,600.
The other major metro areas at the bottom of the affordability scale included San Francisco; Santa Ana-Anaheim-Irvine, Calif.; Los Angeles-Long Beach-Redwood City, Calif.; and Honolulu, all metro areas that have lingered among the bottom rankings for several quarters.
San Luis Obispo-Paso Robles, Calif., was the least affordable of the smaller metro housing markets in the country during the second quarter, followed by Santa Cruz-Watsonville, Calif.; Ocean City, N.J; Santa Barbara-Santa Maria-Goleta, Calif.; and Napa, Calif.