Nearly two-thirds of all new and
existing homes sold during the first quarter of 2014 were termed "affordable"
by the National Association of Home Builders (NAHB)/Wells Fargo Housing
Opportunity Index (HOI). The index rose
from 64.7 in the fourth quarter of 2013 to 65.5 percent.
The HOI measures the percentage of homes
sold during each quarter that could be purchased by families earning the U.S.
median income which during the first quarter was $63,900. The improved HOI was driven primarily by a $10,000
dip in the national median home price to $195,000. At the same time average mortgage interest
rates stabilized, increasing quarter-to-quarter from 4.54 percent to 4.57
Syracuse was the nation's most
affordable major housing market, as 93.7 percent of all new and existing homes sold in this year's first quarter were affordable
to families earning the area's median income of $67,700. Other major markets rated high for
affordability were Buffalo-Niagara Falls, Youngstown-Warren-Boardman, Ohio-Pennsylvania;
Harrisburg-Carlisle, Pennsylvania; and Dayton, Ohio.
The most affordable small market was Cumberland,
Maryland with 96.3 percent of homes sold in the first quarter being affordable
to those earning the median income of $54,100.
Three Ohio markets, Springfield, Mansfield, and Lima, ranked second,
fourth and fifth in affordability with Kokomo, Indiana in third place.
For the sixth consecutive quarter San Francisco-San
Mateo-Redwood City was ranked as the least affordable major market. Just 13.3 percent of homes sold there in the
first quarter were affordable to families earning the area's median income of
$100,400. It was followed by three other
California markets, Santa Ana-Anaheim-Irvine and Los Angeles-Long
Beach-Glendale and fifth place San Jose-Sunnyvale-Santa Clara. New York City-White Plains-Wayne, New York-New
Jersey ranked fourth from the bottom.
All five of the least affordable small
markets were in California. At the very bottom of the affordability chart was
Santa Cruz-Watsonville, where 21.1 percent of all new and existing homes sold
were affordable to families earning the area's median income of $77,900. Other
small markets at the lowest end of the affordability scale included Napa,
Salinas, San Luis Obispo-Paso Robles, and Santa Rosa-Petaluma.
home prices and mortgage interest rates are unlikely to go down, the first
quarter HOI is another indicator that this is an opportune time to buy," said
NAHB Chief Economist David Crowe.