Nationwide Housing Affordability Increases at Year-End 2012
Home-ownership still within reach of median-income consumers; Mahoning Valley remains among affordable leaders.
Exceptionally low interest rates helped ensure a slight gain in nationwide housing affordability amid relatively stable house prices in the final quarter of 2012, according to the newest National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI).
In all, 74.9 percent of homes sold between the beginning of October and end of December were affordable to families earning the U.S. median income of $65,000. This was up nearly a full point from the 74.1 percent of homes sold that were affordable to median-income earners in last year’s third quarter.
“The most recent housing affordability data should be encouraging to many prospective home buyers, because it shows that home-ownership remains within reach of median-income consumers even as most local markets appear to be on a recovery path,” said NAHB Chairman Rick Judson.
He noted that the most recent reading of the NAHB/First American Improving Markets Index found that 259 out of 361 metros currently qualify as improving, including representatives from all 50 states and the District of Columbia.
“The median price of all new and existing homes sold in the fourth quarter of 2012 was $188,000, essentially unchanged from the previous quarter’s $189,000 that marked a nearly three-year high,” noted NAHB Chief Economist David Crowe. “It is noteworthy that affordability remains historically high thanks to favorable mortgage rates even as national home price indexes show some rise in values.”
Ogden-Clearfield, Utah held its position as the nation’s most affordable major housing market for a second consecutive quarter at the end of 2012. There, 93.7 percent of all new and existing homes sold were affordable to families earning the area’s median household income of $71,500 – up slightly from the 93.2 percent of homes affordable to median-income earners in the third quarter.
Also ranking among the most affordable major housing markets in respective order were Dayton, Ohio; Indianapolis-Carmel, Ind.; Lakeland-Winter Haven, Fla.; and Syracuse, N.Y.
Youngstown-Warren-Boardman, OH-PA currently ranks #42 nationally and #24 regionally with 90.2 percent of the homes (median price $79,000) in the area sold to families earning the area’s median household income of $55,000.
Among smaller housing markets, Fairbanks, Alaska, remained at the top of the affordability chart with nearly all homes sold in the quarter — 99.6 percent – affordable to those earning the median income of $92,900. Other small housing markets at the top of the index included Cumberland, Md.; Springfield, Ohio; Monroe, Mich.; and Mansfield, Ohio, in that order.
After 18 consecutive quarters at the bottom of the affordability chart, New York-White Plains-Wayne, N.Y.-N.J. switched places with San Francisco-San Mateo-Redwood City, Calif., which had been the second-to-least affordable market. Just 28.4 percent of homes sold in San Francisco during the fourth quarter were affordable to families earning that area’s median income of $103,000.
Visit www.nahb.org/hoi for tables, historic data and details.