Housing Affordability Increases NationwideFebruary 21st, 2013 by DWM Magazine
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 National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), released today.
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 percentage point from the 74.1 percent of homes sold that were affordable to median-income earners in last year’s third quarter.
“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,” says 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. Also ranking among the most in respective order were Dayton, Ohio; Indianapolis-Carmel, Ind.; Lakeland-Winter Haven, Fla.; and Syracuse, N.Y.
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.
The least affordable small housing market in the fourth quarter was Ocean City, N.J., where just 43.5 percent of homes sold were within reach of families earning the median income of $71,100. Other small metros at the bottom of the affordability chart included San Luis Obispo-Paso Robles and Santa Cruz-Watsonville, Calif., followed by Dover, Del., and Santa Barbara-Santa Maria-Goleta, Calif., respectively.