Slightly lower median home prices along with steady mortgage rates contributed to higher housing affordability in the first quarter of 2014, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI). In all, 65.5 percent of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $63,900. The HOI in the fourth quarter of 2013 was 64.7 percent.
The national median home price dipped from $205,000 in the fourth quarter to $195,000 in the first quarter while average mortgage interest rates were virtually unchanged, moving from 4.54 percent to 4.57 percent in the same period.
Syracuse, N.Y. 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 U.S. housing markets at the top of the affordability chart in the first quarter included Buffalo-Niagara Falls, N.Y.; Youngstown-Warren-Boardman, Ohio-Pa.; Harrisburg-Carlisle, Pa.; and Dayton, Ohio; in descending order.
Meanwhile, Cumberland, Md-W.Va. claimed the title of most affordable smaller market, with 96.3 percent of homes sold in the first quarter being affordable to those earning the median income of $54,100. Smaller markets joining Cumberland at the top of the affordability chart included Springfield, Ohio; Kokomo, Ind.; Mansfield, Ohio; and Lima, Ohio.
San Francisco-San Mateo-Redwood City, Calif. held the lowest spot among major markets on the affordability chart. There, just 13.3 percent of homes sold in the first quarter were affordable to families earning the area’s median income of $100,400. All of the five least affordable small housing 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.
Visit nahb.org/hoi for tables, historic data and details.