Low interest rates and the federal tax credit for first time homebuyers have kept the housing affordability index high, despite a slight decline in the third quarter of 2009. Indianapolis remained the most affordable major housing market, while the least affordable market was the New York-White Plains-Wayne MSA in New York and New Jersey. See the following article from HousingWire for more on this.
Families earning the national median income could afford 70.1% of the new and existing homes sold in Q309, according to the National Association of Home Builders (NAHB) and Wells Fargo (WFC: 27.87 -1.59%) Housing Opportunity Index (HOI).
The index measures housing affordability and Q309’s index was down slightly from the affordability index of 72.3% in Q209 and up from 56.1% in Q308. Low prices and interest rates continue to contribute to increased affordability, NAHB said.
NAHB chairman Joe Robson, a Tulsa, Okla.-based homebuilder, credited the first-time homebuyer tax credit for the high level of affordability.
“With interest rates now lower than last quarter, the tax credit will encourage even more home buyers to enter the market and help stabilize housing and the economy by creating new jobs, stimulating home sales, reducing foreclosures, cutting excess inventories and stabilizing home prices,” Robson said.
For the 17th consecutive quarter, Indianapolis was the most affordable major housing market in the country in Q309. Nearly 95% of all homes were affordable to households earning the area’s median family income of $68,100. Other affordable markets include Youngstown-Warren-Boardman, Ohio-Pa., the Michigan markets of Detroit-Livonia-Dearborn and Warren-Troy-Farmington Hills, as well as Grand Rapids Wyo.
The least affordable market was New York-White Plains-Wayne in New York and New Jersey, where more than 19% of all homes sold during Q309 were affordable to those earning the New York’s median income of $64,800. Other markets on the bottom of the scale include San Francisco, Honolulu, Santa Ana-Anaheim-Irvine, Calif. and Nassau-Suffolk, N.Y.
This article has been republished from HousingWire. You can also view this article at HousingWire, a mortgage and real estate news site.