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U.S. homes became more affordable for the third consecutive quarter, with the Housing Opportunity Index (HOI) rising to its highest level since the second quarter of 2004, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.
"Today’s HOI reading shows that 53.8 percent of all new and existing homes that were sold during the first quarter were affordable to families earning the national median income of $61,500," said NAHB President Sandy Dunn, a builder from Point Pleasant, W.Va.
Dunn attributed the increase in housing affordability to three factors: mortgage rates returning to near record low levels; a $2,500 rise in family income nationwide; and lower house prices.
According to the report, released May 20, Indianapolis maintained its standing as the most affordable major U.S. housing market for the 11th consecutive time in the first quarter. In Indianapolis, 90.1 percent of homes sold in the first quarter were affordable to families earning the area’s median household income of $65,100.
Also near the top of the list for affordable major metro areas were Youngstown-Warren-Boardman, Ohio-Pa.; Grand Rapids-Wyoming, Mich.; Detroit-Livonia-Dearborn, Mich.; and Harrisburg-Carlisle, Pa. Kokomo, Ind., where 95.3 percent of all homes sold in the period were affordable to families earning that area’s median household income of $57,400, was the most affordable smaller (fewer than 500,000 people) metro market.
Los Angeles-Long Beach-Glendale, Calif., held on to its ranking on the HOI as the nation’s least-affordable major housing market for the 14th consecutive quarter. There, just 10.5 percent of new and existing homes sold during the first quarter were affordable to those earning the area’s median family income of $59,800.
Other major metros at the bottom of the housing affordability chart included New York-White Plains-Wayne, N.Y.-N.J.; San Francisco-San Mateo-Redwood City, Calif.; Miami-Miami Beach- Kendall, Fla.; and Santa Ana-Anaheim-Irvine, Calif.