NAHB: Housing affordability surges at year-end 2008MortgagePress.comNAHB, housing affordability, National Association of Home Builders, Wells Fargo Housing Opportunity Index, HOI
Nationwide housing affordability surged at year-end 2008 to its
highest level in at least five years, according to the National
Association of Home Builders/Wells Fargo Housing Opportunity Index
The HOI indicated that 62.4 percent of all new and existing
homes that were sold in the final quarter of 2008 were affordable
to families earning the national median income of $61,500, up
considerably from the 56.1 percent of homes that were affordable to
such families in the previous quarter and the 46.6 percent of homes
that were affordable to them at the end of 2007.
"Falling home prices and very favorable mortgage rates both
contributed to the housing affordability gains we saw in the fourth
quarter of 2008," said NAHB Chairman Joe Robson, a home builder
from Tulsa, Okla. "However, at the same time, worsening economic
conditions, historically low consumer confidence and uncertainty
about future home prices kept many qualified buyers on the
sidelines. Looking forward, we hope that the newly improved
first-time home buyer tax credit, included in recently enacted
economic stimulus legislation, will help spur buyer demand, and
that government efforts to reduce foreclosures will put a floor
under declining home values."
The most affordable major housing market in the country during
the fourth quarter was once again Indianapolis, Ind., which has now
topped the affordability list 14 consecutive times. There, just
over 93 percent of all homes sold in the fourth quarter of 2008
were affordable to households earning the areas median family
income of $65,100.
Also near the top of the list of the most affordable major metro
housing markets were Warren-Troy-Farmington Hills, Mich.;
Youngstown-Warren-Boardman, Ohio-Pa.; Detroit-Livonia-Dearborn,
Mich.; and Grand Rapids-Wyoming, Mich.
Several smaller housing markets posted even higher affordability
scores than Indianapolis, with Lansing-East Lansing, Mich.
outscoring all others. There, a full 95 percent of homes sold at
the end of 2008 were affordable to middle-income earners. Other
small housing markets ahead of Indianapolis on the affordability
scale included Sandusky, Lima and Springfield, all in Ohio, as well
as Bay City, in Michigan.
The nation's least affordable major housing market in the fourth
quarter was again New York-White Plains-Wayne, N.Y.-N.J., where
just under 14 percent of all homes sold during the period were
affordable to those earning the median income of $63,000. This was
the metro areas third consecutive appearance at the bottom of the
list. Other major metros near the bottom of the chart included San
Francisco, Calif.; Nassau-Suffolk, N.Y.; Los Angeles-Long
Beach-Glendale, Calif.; and Miami, Fla.
Among smaller metro areas, San Luis Obispo-Paso Robles, Calif.
was the least affordable market, along with Ocean City, N.J.; Santa
Cruz-Watsonville, Calif.; Napa, Calif.; and Flagstaff, Ariz.,
Please visit www.nahb.org/hoi for tables,
historic data and details.
The NAHB/Wells Fargo HOI is a measure of the percentage of homes
sold in a given area that are affordable to families earning that
area's median income during a specific quarter. Prices of new and
existing homes sold are collected from actual court records by
First American Real Estate Solutions, a marketing company. Mortgage
financing conditions incorporate interest rates on fixed- and
adjustable-rate loans reported by the Federal Housing Finance
The NAHB/Wells Fargo Housing Opportunity Index is strictly the
product of NAHB Economics, and is not seen or influenced by any
outside party prior to being released to the public.
For more information, visit www.nahb.org.