Housing Affordability Rises to Highest Level in Two Decades
February 17, 2011 – Nationwide housing affordability during the fourth quarter of 2010 rose to its highest level in the 20 years since it has been measured, according to National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) data released today.
The HOI indicated that 73.9 percent of all new and existing homes sold in the fourth quarter of 2010 were affordable to families earning the national median income of $64,400. The record-setting index for the fourth quarter surpassed the previous high of 72.5 percent set during the first quarter of 2009 and marked the eighth consecutive quarter that the index has been above 70 percent. Until 2009, the HOI rarely topped 65 percent and never reached 70 percent.
“Today’s report shows that housing affordability at the end of 2010 was at its highest level since we started computing the HOI,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. “However, while this is good news for consumers, both home buyers and builders continue to confront extremely tight credit conditions, and this remains a significant obstacle to many potential home sales.”
Indianapolis-Carmel, Ind., was the most affordable major housing market in the country for the second consecutive quarter, after relinquishing for a quarter the top spot it has held for five years. In Indianapolis, 93.5 percent of all homes sold were affordable to households earning the area’s median family income of $68,700.
Also ranking near the top of the most affordable major metro housing markets were Youngstown-Warren-Boardman, Ohio-Pa.; Syracuse, N.Y; Warren-Troy-Farmington Hills, Mich.; and Detroit-Livonia-Dearborn, Mich.
Among smaller housing markets, the most affordable was Elkhart-Goshen, Ind., where 97.0 percent of homes sold during the fourth quarter of 2010 were affordable to families earning a median income of $58,600. Other smaller housing markets near the top of the index included Lansing-East Lansing, Mich.; Kokomo, Ind.; Mansfield, Ohio; and Bay City, Mich.,.