Housing Affordability Dips in Second Quarter

Filed in Economics by on August 14, 2014 0 Comments

RedHousegraphicHomes were less affordable in the second quarter of 2014, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI), released today.

In all, 62.6% of new and existing homes sold between the beginning of April and the end of June were affordable to families earning the U.S. median income of $63,900. This is down from the 65.5% of homes in the first quarter.

During that same period, the national median home price rose from $195,000 to $214,000 and average mortgage interest rates dropped from 4.57% to 4.44%.

That last statistic is especially good news for buyers. “With interest rates near historically low levels and strengthening job growth, now continues to be a great opportunity to buy a home,” said NAHB Chairman Kevin Kelly.

Most, Least Affordable Markets

Youngstown-Warren-Boardman, Ohio-Pa. was the nation’s most affordable major housing market and Cumberland, Md.-W.Va. was the most affordable smaller market in the second quarter.

Other major markets at the top of the affordability chart included Indianapolis-Carmel, Ind.; Syracuse, N.Y.; Harrisburg-Carlisle, Pa.; and Scranton-Wilkes-Barre, Pa; in descending order.

Meanwhile, smaller markets joining Cumberland included Kokomo, Ind.; Davenport-Moline-Rock Island, Iowa-Ill.; Battle Creek, Mich.; and Lima, Ohio; in descending order.

For a seventh consecutive quarter, San Francisco-San Mateo-Redwood City, Calif. was the nation’s least affordable major housing market.

Other major metros at the bottom of the list were Santa Ana-Anaheim-Irvine, Calif.; Los Angeles-Long Beach-Glendale, Calif.; San Jose-Sunnyvale-Santa Clara, Calif.; and New York-White Plains-Wayne, N.Y.-N.J.; in descending order.

All five least affordable small housing markets were in California. At the very bottom was Santa Cruz-Watsonville. Other small markets included Napa, Salinas, Santa Rosa-Petaluma, and San Luis Obispo-Paso Robles; in descending order.

Please visit nahb.org/hoi for tables, historic data and details about how the HOI is calculated.

View NAHB’s Eye on Housing blog for more analysis.

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