Home Affordability at Record Level

May 25, 2011 (Shirley Allen)

The ability for Americans to own a home has reached a record level according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI). Data from the HOI shows that 74.6 percent of all new and existing homes sold in the first quarter of 2011 were affordable to families who earned the national median income of $64,400.

The HOI, which up until 2009 rarely topped 65 percent and had never previously topped 70 percent, has been above the 70 percent mark for nine consecutive quarters. The first quarter’s mark exceeds the previous high of 73.9 percent reached in the fourth quarter of 2010.

“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.”

The most affordable major market area was Syracuse, New York, where 94.5 percent of all homes sold were affordable to the area residents whose median family income is $64,300.

Kokomo, Indiana, was the most affordable area among the smaller housing markets, as 98.6 percent of the homes sold during the quarter were affordable to area residents where the median income is $61,400.

The least affordable major market area was New York-White Plains-Wayne, New York-New Jersey, where only 24.1 percent of all homes sold during the first quarter were affordable based on a median income for the area of $65, 600. This was the 12th consecutive quarter that the New York area has been the least affordable.

San Luis Obispo-Paso Robles, California, was the least affordable small market area where 47.6 percent of the residents could afford a home on the area’s median income of $72,500.

Tags: NAHB, Wells Fargo, Housing Opportunity Index, new homes, existing homes, affordability, median income, HOI, low interest rates

Source:
NAHB