Housing Affordability Posted Gain in Q1

Washington, DC, May 13, 2016—Spurred by a modest reduction in mortgage interest rates and favorable home prices, nationwide housing affordability in the first quarter of 2016 posted a slight increase, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI).

In all, 65% 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 $65,700. This is up from the 63.3% of homes sold that were affordable to median-income earners in the fourth quarter.

The national median home price fell from $226,000 in the fourth quarter to $223,000 in the first quarter. Meanwhile, average mortgage rates edged lower from 4.09% to 4.05% in the same period.

For the second consecutive quarter, Youngstown-Warren-Boardman, Ohio-Pennsylvania, was rated the nation’s most affordable major housing market. There, 93.1% of all new and existing homes sold in the first quarter were affordable to families earning the area’s median income of $53,900.

Rounding out the top five affordable major housing markets in respective order were Syracuse, New York; Indianapolis-Carmel-Anderson, Indiana; Scranton-Wilkes-Barre-Hazleton, Pennsylvania; and Toledo, Ohio.

Meanwhile, Cumberland, Maryland-West Virginia, claimed the title of most affordable small housing market in the first quarter of 2016. There, 98% of homes sold during the first quarter were affordable to families earning the area’s median income of $55,100.

Smaller markets joining Cumberland at the top of the list included Wheeling, West Virginia-Ohio; Fairbanks, Alaska; Binghamton, New York; and Davenport-Moline-Rock Island, Iowa-Illinois.

For the 14th consecutive quarter, San Francisco-Redwood City-South San Francisco, California was the nation’s least affordable major housing market. There, just 10.4% of homes sold in the first quarter were affordable to families earning the area’s median income of $96,800.

Other major metros at the bottom of the affordability chart were located in California. In descending order, they included Los Angeles-Long Beach-Glendale; Anaheim-Santa Ana-Irvine; San Jose-Sunnyvale-Santa Clara; and San Diego-Carlsbad.

Four of the five least affordable small housing markets were also in California. At the very bottom of the affordability chart was Santa Cruz-Watsonville, California, where 16.1% of all new and existing homes sold were affordable to families earning the area’s median income of $85,100.

Other small markets at the lowest end of the affordability scale included Salinas, California; Napa, California; San Luis Obispo-Paso Robles-Arroyo Grande, California; and Kahului-Wailuku-Lahaina, Hawaii.