Home Affordability Near Highest Level in 20 Years

The National Association of Home Builders/Wells Fargo Housing Opportunity Index shows that affordability is one bright spot in the residential property market. In addition to interest rates in the 4 percent range, home buyers are benefiting from a big drop in the U.S. median home price to $176,000 in the third quarter from $248,000 in 2006. At the third-quarter median price, 72.9 percent of the homes sold were affordable to households earning the median income of $64,200, compared to 40.4 percent five years ago. According to the index, the most affordable markets were Fairbanks, Alaska, at 97.8 percent; Kokomo, Ind., at 96.9 percent; and Lakeland, Fla., at 92.5 percent. However, only 23.3 percent of homes were affordable to buyers earning the median income in the New York/White Plains/Wayne metroplex, which has held the most expensive spot for 14 consecutive quarters. Several markets in California were in the top 10 lists for the most expensive big and small metro areas. | Read More