Indianapolis Retains Crown As Nation's Most Affordable Housing Market Printer Friendly
August 22, 2006
Indianapolis, Ind. maintained its standing as the most affordable major U.S. housing market for a fourth consecutive time in the second quarter of 2006, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), released today. Meanwhile, nationwide housing affordability edged slightly downward as the median price of all homes sold in the period remained unchanged and a slight uptick was registered in the average mortgage rate. “Today’s HOI reading indicates that 40.6 percent of new and existing homes that were sold during the second quarter were affordable to families earning the national median income of $59,600,” said NAHB President David Pressly, a home builder from Statesville, N.C. “This is just below the 41.3 percent of homes that were affordable to median-income earners in the first quarter and tied to the somewhat higher mortgage rates that prevailed in the April – June period.” The HOI indicates that the national weighted interest rate on fixed and adjustable-rate mortgages – a key component in calculating the HOI – was 6.65 percent in the second quarter, compared to 6.39 percent in the first quarter. In the nation’s most affordable major housing market of Indianapolis, 87.4 percent of homes sold in the second quarter were affordable to families earning the area’s median household income of $65,100. The median sales price of all homes sold in Indianapolis during that time was $120,000, which is up from $113,000 in the previous quarter and equivalent to the median sales price for Indianapolis homes sold in the final quarter of 2005. Also near the top of the list for affordable major metros this time around were Detroit-Livonia-Dearborn, Mich.; Grand Rapids-Wyoming, Mich.; Buffalo-Niagara Falls, N.Y.; and Youngstown-Warren-Boardman, Ohio-Pa., in that order. Five smaller metro markets outranked all others in terms of housing affordability during the second quarter, including Springfield, Ohio, as well as four Michigan locations: Bay City, Lansing-East Lansing, Saginaw-Saginaw Township North, and Battle Creek, respectively. Also maintaining its previous standing on the HOI was Los Angeles-Long Beach-Glendale, Calif., which was the nation’s least-affordable major housing market for a seventh consecutive quarter. There, just under 2 percent of new and existing homes sold during the second quarter were affordable to those earning the area’s median family income of $56,200. The median sales price of all homes sold in the area during the period was $521,000. Other major metros at the bottom of the housing affordability chart included Santa Ana-Anaheim-Irvine, Calif.; San Diego-Carlsbad-San Marcos, Calif.; New York-White Plains-Wayne, N.Y.-N.J.; and Stockton, Calif., in that order. Among metro areas smaller than 500,000 people, every entry at the bottom of the affordability chart was located in California, starting with Salinas as the least affordable and followed by Merced, Modesto, Santa Cruz-Watsonville and Santa Barbara-Santa Maria, Calif., respectively. Please visit www.nahb.org/hoi for tables, historic data and details.