By Mike Colpitts
Housing affordability is at its best level for the seventh straight quarter in decades, according to the National Association of Home Builders-Wells Fargo index. The lowest mortgage rates since 1951 triggered an increase in home sales. The index showed that 71.1% of all homes sold in the third quarter of the year were affordable to families earning the nation’s median income.
The index was narrowly close to the record high set in the first quarter of 2009 when it reached a high of 72.5%, meaning that nearly three-quarters of all Americans could afford to purchase a home. It also marked the seventh time that the index was above 70%. The national median income is $64,400.
“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 National Association of Homebuilders 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 .”
Indianapolis, Indiana was the most affordable major housing market in the U.S. during the quarter, where 93.3% of homes sold were affordable to households earning the median family income. Youngstown-Warren-Boardman, Ohio-Pennsylvania; Grand Rapids-Wyoming, Michigan; and Dayton, Ohio, and Wichita, Kansas were near the top of the list of the most affordable major metro housing markets.
Kokomo, Indiana ranked as the top smallest housing market for affordability, where 96.1% percent of homes sold during the third quarter made the most affordable guidelines. Other smaller housing markets near the top of the index include Mansfield, Ohio; Lima, Ohio; Monroe, Michigan; and Bay City, Michigan.
New York-White Plains, N.Y leads the nation as the least affordable major housing market. Only 22.6% of all homes sold in the New York metropolitan area during the quarter were affordable to those earning the area’s median income. It was the tenth consecutive quarter that the New York area has held the position.