Housing Affordability Surges At Year-End 2008

WASHINGTON — Nationwide housing affordability surged at year-end 2008 to its highest level in at least five years, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), released Feb. 19.
The HOI indicated that 62.4% of all new and existing homes that were sold in the final quarter of 2008 were affordable to families earning the national median income of $61,500, up considerably from the 56.1% of homes that were affordable to such families in the previous quarter and the 46.6% of homes that were affordable to them at the end of 2007.
“Falling home prices and very favorable mortgage rates both contributed to the housing affordability gains we saw in the fourth quarter of 2008,” said NAHB Chairman Joe Robson, a homebuilder from Tulsa, OK. “However, at the same time, worsening economic conditions, historically low consumer confidence and uncertainty about future home prices kept many qualified buyers on the sidelines.”
The most affordable major housing market in the country during the fourth quarter was once again Indianapolis, IN, which has now topped the affordability list 14 consecutive times. There, just over 93% of all homes sold in the fourth quarter of 2008 were affordable to households earning the area’s median family income of $65,100.
Also near the top of the list of the most affordable major metro housing markets were Warren-Troy-Farmington Hills, MI; Youngstown-Warren-Boardman, OH-PA; Detroit-Livonia-Dearborn, MI; and Grand Rapids-Wyoming, MI.
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