Good news / bad news
With most economic indicators, there is a silver lining to be found, and while there is good news for housing that prices continue to improve, and underwater borrowers may see the light at the end of the tunnel as values recover, affordability slips each time the price ticker rises. According to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), released today, second quarter data shows strengthening home prices which contributed to slightly lower housing affordability.
The latest HOI data reveal that 73.8 percent of all new and existing homes sold in the second quarter were affordable to families earning the national median income of $65,000, down from a record high of 77.5 percent in first quarter. Fully 92 percent of metros covered in the latest HOI saw their median home prices rise between the first and second quarter.
“While interest rates and overall housing affordability remain very favorable on a historic basis, the decline in the latest HOI is a positive development because it is another signal that the housing recovery is starting to take root, and it lends needed confidence to prospective buyers and sellers who have been reluctant to move forward in the current marketplace,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla.
Most affordable market: Youngstown, OH
The most affordable major housing market in this year’s second quarter was Youngstown-Warren-Boardman, Ohio-Pa., where 93.4 percent of homes sold during the period were affordable to households earning the area’s median family income of $55,700.
Also ranking among the most affordable major housing markets in respective order were Dayton, Ohio; Buffalo-Niagara Falls, N.Y.; Indianapolis-Carmel, Ind.; and Modesto, Calif.
Among smaller housing markets, Fairbanks, Alaska topped the affordability chart with 98.7 percent of homes sold during the second quarter being affordable to families earning the area’s median income of $92,900. Other smaller housing markets at the top of the index include Mansfield and Springfield, Ohio; Carson City, Nev.; and Kokomo, Ind.
Least affordable market: New York City
Meanwhile, New York- White Plains-Wayne, N.Y.-N.J. retained the title of the least affordable major housing market in the country for a 17th consecutive quarter, with just 29.4 percent of homes sold there being affordable to families earning the area’s median income of $68,300 as of the second quarter.
Other major metros at the bottom of the affordability chart included San Francisco-San Mateo-Redwood City, Calif.; Bridgeport-Stamford-Norwalk, Conn.; Santa Ana-Anaheim-Irvine, Calif.; and Los Angeles-Long Beach-Glendale, Calif.; in that order.
Ocean City, N.J., retained its title as the least affordable smaller housing market in the second quarter, with just 43.8 percent of homes sold in the second quarter affordable to families earning the median income of $71,100. Other small metros at the bottom of the list included San Luis Obispo-Paso Robles, Calif.; Santa Cruz-Watsonville, Calif.; Dover, Del.; and Santa Barbara-Santa Maria-Goleta, Calif., respectively.
Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.
brokerstand
August 14, 2012 at 5:15 pm
@EdgarWilson Thanks for the RT! Happy Tuesday : )