Housing Affordability Rises to Record Level, Tight Financing Continues to Constrain Sales
NAHB: May 25, 2011 - Nationwide housing affordability during the
first quarter of 2011 rose to its highest level in the more than 20
years it has been measured, according to National Association of Home
Builders/Wells Fargo Housing Opportunity Index (HOI) data released
today.
The HOI indicated that 74.6 percent of all new and existing
homes sold in the first quarter of 2011 were affordable to families
earning the national median income of $64,400. This eclipsed the
previous high of 73.9 percent set during the fourth quarter of 2010 and
marked the ninth consecutive quarter that the index has been above 70
percent. Until 2009, the HOI rarely topped 65 percent and never reached
70 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, chairman of the National Association of Home Builders (NAHB)
and a home builder from Reno, Nev. "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."
Syracuse, N.Y., was the most affordable
major housing market in the country during the first quarter of the
year. In Syracuse, 94.5 percent of all homes sold were affordable to
households earning the area's median family income of $64,300.
Also
ranking near the top of the most affordable major metro housing markets
were Youngstown-Warren-Boardman, Ohio-Pa.; Indianapolis-Carmel, Ind.;
Warren-Troy-Farmington Hills, Mich.; and Toledo, Ohio.
Among
smaller housing markets, the most affordable was Kokomo, Ind., where
98.6 percent of homes sold during the first quarter of 2011 were
affordable to families earning a median income of $61,400. Other smaller
housing markets near the top of the index included Monroe, Mich.;
Cumberland, Md.-W.Va.; Elkhart-Goshen, Ind.; and Springfield, Ohio.
New
York-White Plains-Wayne, N.Y.-N.J., led the nation as the least
affordable major housing market during the first quarter of 2011. In New
York, 24.1 percent of all homes sold during the quarter were affordable
to those earning the area's median income of $65,600. This marks the
12th consecutive quarter that the New York metropolitan division has
held this position.
Other major metro areas near the bottom of the
affordability index included San Francisco-San Mateo-Redwood City,
Calif.; Los Angeles-Long Beach-Glendale, Calif.; Honolulu; and Santa
Ana-Anaheim-Irvine, Calif., respectively.
San Luis Obispo-Paso
Robles, Calif., where 47.6 percent of the homes were affordable to
families earning the median income of $72,500, was the least affordable
of the smaller metro housing markets in the country during the first
quarter. Other small metro areas ranking near the bottom included Santa
Cruz-Watsonville, Calif.; Laredo, Texas; Ocean City, N.J; and Santa
Barbara-Santa Maria-Goleta, Calif.
Please visit www.nahb.org/hoi for tables, historic data and details.
EDITOR'S
NOTE: The NAHB/Wells Fargo HOI is a measure of the percentage of homes
sold in a given area that are affordable to families earning that area's
median income during a specific quarter. Prices of new and existing
homes sold are collected from actual court records by First American
Real Estate Solutions, a marketing company. Mortgage financing
conditions incorporate interest rates on fixed- and adjustable-rate
loans reported by the Federal Housing Finance Board.