Thursday, September 10, 2009

Housing Affordability Remains at Near-Record Levels

An excerpt from an article from the National Association of Homebuilders:

Bolstered by affordable interest rates and low prices, national housing affordability on the NAHB/Wells Fargo Housing Opportunity Index (HOI) continued in this year’s second quarter to hover near its highest level since the series began 18 years ago.

The HOI showed that 72.3% of all new and existing homes sold in the second quarter of 2009 were affordable to families earning the national median income of $64,000, down only slightly from the record-high 72.5% during the previous quarter and up from 55.0% during the second quarter of 2008.

“The increase in affordability — along with the $8,000 federal tax credit for home buyers — is stimulating demand, particularly among young, first-time buyers,” said NAHB Chairman Joe Robson. “But to keep the recent upturn in home sales going into next year, Congress will need to extend the tax credit for another year and make it available to all buyers in an effort to encourage activity in the trade-up market.”

Robson noted that the tax credit, which expires on Nov. 30, is currently limited to just buyers purchasing their first home.

Indianapolis, once again, was the most affordable major housing market in the country during the second quarter. Almost 95% of all homes sold were affordable to households earning the area’s median family income of $68,100. Indianapolis has now topped the affordability list for 16 consecutive quarters.

Rounding out the list of the five most affordable major metro housing markets were: Youngstown-Warren-Boardman, Ohio-Pa.; Detroit-Livonia-Dearborn, Mich.; Dayton, Ohio; and Grand Rapids-Wyoming, Mich.

Several smaller housing markets posted even higher affordability scores than Indianapolis, with Kokomo, Ind. outscoring them all. There, almost 98% of homes sold during the second quarter of 2009 were affordable to median-income earners.

Other small housing markets ahead of Indianapolis on the affordability scale included: Lansing-East Lansing, Mich.; Mansfield, Ohio; Elkhart-Goshen, Ind.; Lima, Ohio; and Bay City, Mich.

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