Modest home price and interest rate increases resulted in a slight drop in nationwide housing affordability in the third quarter of 2015, according to the National Association of Home Builders Housing Opportunity Index (HOI).
“Attractive home prices and interest rates, along with firming job growth, are helping housing markets across the country to gradually improve,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo. “While this bodes well for housing in the coming year, builders continue to face challenges, including a lack of available lots and skilled labor.”
“The decline in the index was slight and affordability remains good,” said NAHB Chief Economist David Crowe. “With mortgage rates near historic lows and home prices advancing at a modest pace, this is an excellent time to buy.”
In all, 62.2 percent of new and existing homes sold between the beginning of July and end of September were affordable to families earning the U.S. median income of $65,800. This is down from the 63.2 percent of homes sold that were affordable to median-income earners in the second quarter.
The national median home price increased slightly from $230,000 in the second quarter to $231,000 in the third quarter. Meanwhile, average mortgage rates edged higher from 3.99 percent to 4.18 percent in the same period.
Greenville and the Upstate
The index for Greater Greenville rose to 80 in the second quarter from 77.7 in the first quarter and 73.4 in the same quarter last year. House prices rose slightly while income remained the same. Greater Greenville ranks as the 76th most affordable housing market in the country.
Syracuse, N.Y. was rated the nation’s most affordable major housing market, switching places with Youngstown-Warren-Boardman, Ohio-Pa., which fell to the second slot on the list. In Syracuse, 91.7 percent of all new and existing homes sold in this year’s third quarter were affordable to families earning the area’s median income of $68,500.
Rounding out the top five affordable major housing markets in respective order were Harrisburg-Carlisle, Pa.; Indianapolis-Carmel, Ind.; and Scranton-Wilkes-Barre, Pa.
Meanwhile, Glens Falls, N.Y. claimed the title of most affordable small housing market in this year’s third quarter. There, 92.6 percent of homes sold during the second quarter were affordable to families earning the area’s median income of $65,400.
Smaller markets joining Glens Falls at the top of the list included Sandusky, Ohio; Kokomo, Ind.; Springfield, Ohio; and Rockford, Ill.
For the 12th consecutive quarter, San Francisco-San Mateo-Redwood City, Calif. was the nation’s least affordable major housing market. There, just 10.5 percent of homes sold in the third quarter were affordable to families earning the area’s median income of $103,400.
Other major metros at the bottom of the affordability chart were located in California. In descending order, they included Los Angeles-Long Beach-Glendale.; Santa Ana-Anaheim-Irvine.; San Jose-Sunnyvale-Santa Clara.; and Santa Rosa-Petaluma.
All five least affordable small housing markets were also in California. At the very bottom of the affordability chart was Santa Cruz-Watsonville, Calif., where 16.5 percent of all new and existing homes sold were affordable to families earning the area’s median income of $87,000. Other small markets at the lowest end of the affordability scale included Salinas; Napa; San Luis Obispo-Paso Robles; and Santa Barbara-Santa Maria-Goleta, respectively.
Please visit nahb.org/hoi for tables, historic data and details.
The Housing Opportunity Index (HOI) is a measure of the percentage of homes sold in a given area that are affordable to families earning the area’s median income during a specific quarter. Prices of new and existing homes sold are collected from actual court records by Core Logic, a data and analytics company. Mortgage financing conditions incorporate interest rates on fixed- and adjustable-rate loans reported by the Federal Housing Finance Agency. The HOI is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public.