Home Builders Rate Most Affordable Major Housing M
Washington, DC, February 28--Buffalo-Niagara Falls, N.Y. is the nation’s most affordable housing market among major metropolitan areas with populations over one million, according to the newly released National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) for the fourth quarter of 2004.
Among smaller markets, Lima, Ohio rated tops for metros with fewer than 250,000 people, while Saginaw-Bay City-Midland, Mich., was the most affordable midsized market with 250,000 to just under one million people.
"A dip in mortgage rates during last year’s final quarter made it easier for many families to become homeowners," said NAHB president Dave Wilson, a custom home builder from Ketchum, Idaho. "That’s true in Buffalo and across the country."
According to the HOI, the average interest rate on home mortgages fell to 5.77 percent in the fourth quarter compared to 5.83 percent in the third quarter. As a result, 52 percent of homes sold nationwide in the final months of 2004 were affordable to families earning the median U.S. household income of $57,500. This was up from 50.4 percent of homes sold that were affordable to those families in the third quarter, but well behind the 61.2 percent of homes affordable at the beginning of 2004.
"Make no mistake – we still have major work to address the housing affordability crunch in America," Wilson noted. "Out of the 160 metro areas in our survey, housing affordability fell in 73 locations between the third and fourth quarters of 2004.The fact remains that buying a home is becoming increasingly difficult for America’s working families."
Buffalo-Niagara, N.Y., was the nation’s most affordable major market and the sixth most affordable market overall – behind the less-populated metros of Lima, Ohio; Cumberland, Md.; Mansfield, Ohio; Saginaw-Bay City-Midland, Mich.; and Canton-Massillon, Ohio, respectively. In Buffalo, nearly 90 percent of homes sold in 2004’s final quarter were affordable to families earning the area median income of $53,600. The median price of homes sold in the market during that period was $79,000.
With nine markets appearing on the 25 Most Affordable Metro Areas list, Ohio wins the title of the most affordable state in which to buy a home nationwide. Illinois and Michigan tied as the second-most affordable states, with four metros in each appearing on the top-25 list.
On the flip side of the coin, Los Angeles-Long Beach, Calif. tied with Salinas, Calif. for the bottom-most spot on the 25 Least Affordable Metro Areas list. With 19 entries on that list, California was once again the nation’s least affordable state housing market overall. No other state had more than two entries in the least-affordable column.
"Nowhere are the effects of excessive regulation more apparent than in California’s housing market," said Wilson. "In Los Angeles-Long Beach, where the median home price was $415,000 in the fourth quarter, a miniscule 5.2 percent of homes sold were affordable to median-income families earning $53,500 per year. That’s a tough situation that needs to be addressed with reformed land-use policies that allow more affordable housing to be built."
