Housing affordability remained near its highest level nationwide for the seventh consecutive quarter as interest rates dipped below 5%, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI) released on Nov. 18.

Interest rates during the quarter were at their lowest level since the HOI was first compiled nearly 20 years ago.

The HOI indicated that 72.1% of all new and existing homes sold in the third quarter of 2010 were affordable to families earning the national median income of $64,400. The index for the third quarter almost equaled the record-high 72.5% set during the first quarter of 2009 and marked the seventh consecutive quarter that the index rose above 70%. Until 2009, the HOI rarely topped 65% and never reached 70%.

"With interest rates remaining at historically low levels, and house prices starting to stabilize, homeownership is within reach of more households than it has been for almost 20 years," said NAHB Chairman Bob Jones. "While these favorable conditions are beginning to draw home buyers back into the market, builders continue to have major problems in obtaining credit for new-home construction, and this obstacle must be overcome if builders are to respond to improving demand moving forward."

Indianapolis-Carmel, Ind., was the most affordable major housing market in the country, regaining the top ranking it held for nearly five years after being edged out by Syracuse, N.Y., in this year’s second quarter. In Indianapolis, 93.3% of all homes sold were affordable to households earning the area's median family income of $68,700.

Also at the top of the list of the most affordable major metro housing markets were; Youngstown-Warren-Boardman, Ohio-Pa.; Grand Rapids-Wyoming, Mich.; Dayton, Ohio, and Wichita, Kan., in that order.

Among smaller housing markets, the most affordable was Kokomo, Ind., where 96.1% of homes sold during the third quarter of 2010 were affordable to families earning a median-income of $61,400. Other smaller housing markets at the top of the index included: Mansfield, Ohio; Lima, Ohio; Monroe, Mich.; and Bay City, Mich., respectively.

New York-White Plains-Wayne, N.Y.-N.J., continued in the third quarter to lead the nation as the least affordable major housing market. In New York, 22.6% of all homes sold during the quarter were affordable to those earning the area's median income of $65,600. This was the 10th consecutive quarter that the New York metropolitan division has occupied this position.

The other major metro areas at the bottom of the affordability scale included: San Francisco; Bridgeport-Stamford-Norwalk, Conn.; Los Angeles-Long Beach-Glendale, Calif.; and Santa Ana-Anaheim-Irvine, Calif., respectively.

Santa Cruz-Watsonville, Calif. was the least affordable of the smaller metro housing markets in the country during the third quarter. Other small metro areas ranking at the bottom included: San Luis Obispo-Paso Robles, Calif.; Santa Barbara-Santa Maria-Goleta, Calif.; Ocean City, N.J; and Napa, Calif.