Housing affordability has risen to a record high, with nearly three-quarters of all homes sold affordable to families earning the national median income.
In the first quarter of 2011, 74.6 percent of all homes sold nationwide were affordable to a family earning the national median income of $64,400, according to the latest National Association of Home Builders/Wells Fargo Home Opportunity Index (HOI), released today.
It’s the highest the HOI has been in two decades of recordkeeping and the ninth consecutive quarter it has exceeded 70 percent. Prior to the recent recession, the index rarely went higher than 65 percent.
“With interest rates remaining at historically low levels, today's report indicates that homeownership is within reach of more households than it has been for more than two decades,” said Bob Nielsen, NAHB chair. “While this is good news for consumers, home buyers and builders continue to confront extremely tight credit conditions, and this remains a significant obstacle to many potential home sales.”
The index is based on a combination of national income levels, home prices and mortgage interest rates. Home sales data is based upon both new and existing homes.
Despite the recent high affordability levels, home sales remain sluggish due to tight mortgage credit, with lenders demanding strong credit histories and substantial down payments. Buyers are also proceeding cautiously due to concerns that home prices may continue to decline.
The most affordable large metro area was Syracuse, N.Y., where it was calculated that 94.5 percent of homes sold were affordable to a family earning the area’s median income of $64,300. Other highly affordable large markets included Youngstown-Warren-Boardman, Ohio-Pa.; Indianapolis-Carmel, Ind.; Warren-Troy-Farmington Hills, Mich.; and Toledo, Ohio.
Not surprisingly, the nation’s least affordable major housing market was the area around New York City, including White Plains, N.Y. and Wayne, N.J., where only 24.1 percent of homes sold were affordable to families earning the median income of $65,400.
Other least-affordable metropolitan areas included three in California – San Francisco-San Mateo-Redwood City, with a rating of 33.1 percent, and Los Angeles-Long Beach-Glendale, Calif.; and Santa Ana-Anaheim-Irvine, where about 43 percent of homes sold were deemed affordable to a median income family.
Via
http://www.mortgageloan.com/home-affordability-hits-new-high-8691
