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Housing Affordability Almost Back to Normal

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Housing Affordability Almost Back to Normal

A new report from the National Association of Home Builders shows housing affordability is almost back to normal, approaching pre-2004 levels. Even though, housing affordability did dip slightly in Q2 of this year, it was due to a firming of home prices according to the latest NAHB/Wells Fargo Housing Opportunity Index (HOI).

The second quarter HOI was 62.6 nationwide, which means 62.6 percent of new and existing homes sold during Q2 were affordable to a family who earned the median income of $63,900—down almost three points on the index over the Q1 reading of 65.5.

These recent numbers represent a slow but steady trek toward historically normal appreciation and interest rates, resulting in an HOI reading that’s more typical of the time prior to the mid-2000s boom.
According to the numbers, Youngstown-Warren-Boardman, Ohio-Pa. is the nation’s most affordable major housing market, as 90.4 percent of all new and existing homes sold in Q2 2014 were affordable to a family earning the area’s median income of $52,700.

Other markets at the top of the affordability chart include: Indianapolis-Carmel, Ind.; Syracuse, N.Y.; Harrisburg-Carlisle, Pa.; and Scranton-Wilkes-Barre, Pa. Smaller markets joining Cumberland at the top of the affordability chart were Kokomo, Ind.; Davenport-Moline-Rock Island, Iowa-Ill.; Battle Creek, Mich. and Lima, Ohio.

The nation’s least affordable small housing markets are all in California: Santa Cruz-Watsonville, Napa, Salinas, Santa Rosa-Petaluma and San Luis Obispo-Paso Robles.

Read the full article from NAHB here.

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