Exceptionally low interest rates helped ensure a slight gain in nationwide housing affordability amid relatively stable house prices in the final quarter of 2012. The NAHB/Wells Fargo Housing Opportunity Index (HOI) rose to 74.9 percent, up from 74.1 percent in the third quarter.
The HOI is the share of new and existing homes sold in a quarter affordable to a family earning the median income. An HOI of 74.9 means that 74.9 percent of all homes sold in the last three months of 2012 were affordable to families earning the national median income ($65,000).
Ogden-Clearfield, Utah held its position as the nation’s most affordable major housing market for a second consecutive quarter at the end of 2012. There, 93.7 percent of all new and existing homes sold were affordable to families earning the area’s median household income of $71,500.
Among smaller housing markets, Fairbanks, Alaska, remained at the top of the affordability chart with nearly all homes sold in the quarter — 99.6 percent – affordable to those earning the median income of $92,900.
After 18 consecutive quarters at the bottom of the affordability chart, New York-White Plains-Wayne, N.Y.-N.J. switched places with San Francisco-San Mateo-Redwood City, Calif., which had been the second-to-least affordable market. Just 28.4 percent of homes sold in San Francisco during the fourth quarter were affordable to families earning that area’s median income of $103,000.
The least affordable small housing market in the fourth quarter was Ocean City, N.J., where just 43.5 percent of homes sold were within reach of families earning the median income of $71,100.