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The final quarter of 2015 saw a modest uptick in housing, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI).
The data in the new HOI revealed that 63.3 percent of new and existing homes sold between the beginning of October and end of December were affordable to families earning the U.S. median income of $65,800, up 1.2 percent from the third quarter. Helping affordability was the decline in the national median home price—a drop from $231,000 in the third quarter to $226,000 in the fourth quarter—and average mortgage rates that declined from 4.18 percent to 4.09 percent in the same period.
The combined Ohio-Pennsylvania metro market of Youngstown-Warren-Boardman was rated the nation’s most affordable major housing market, where 90.1 percent of all new and existing homes sold in the fourth quarter were affordable to families earning the area’s median income of $53,700. Binghamton, N.Y., was cited as the most affordable small housing, with 94.6 percent of homes selling at an affordable level to families earning the area’s median income of $66,400. On the flip side, California’s San Francisco-San Mateo-Redwood City, Calif. was the nation’s least affordable major housing market for the 13th consecutive quarter, with 10.4 percent of homes selling at an affordable level to families earning the area’s median income of $103,400.
“Affordable home prices, attractive mortgage rates, and pent-up demand are keeping the housing market on a gradual, upward path,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “While this bodes well for housing in 2016, builders continue to face a number of challenges, including excessive and costly regulations and a lack of available lots and skilled labor.”