Housing affordability climbed to its highest level in five years at the end of 2008, with Indianapolis, Ind., maintaining its status as the most affordable major market, according to the latest NAHB/Wells Fargo Housing Opportunity Index (HOI).
Nearly two-thirds (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 from 56.1 percent in the third quarter and 46.6 percent at the end of 2007. The trade group says that falling home prices and favorable mortgage rates have contributed to the higher affordability level.
For the 14th consecutive quarter, Indianapolis, Ind. was the most affordable housing market in the country. Of all homes sold in that metro area during the fourth quarter, 93 percent were affordable to households earning the area’s median income of $65,100. Other affordable markets include Farmington Hills, Mich.; Youngstown, Ohio; Detroit; and Grand Rapids, Mich.
The least affordable housing market during the fourth quarter was New York-White Plains, N.Y., where only 14 percent of all homes sold were affordable to those earning the median income of $63,000. San Francisco, Nassau-Suffolk, N.Y., Los Angeles and Miami were among the other least affordable U.S. markets.