Lower interest rates and home prices contributed to a solid boost in nationwide affordability in the first quarter of 2015, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) released today.
“Consumers benefitted from continued low mortgage rates and some fall in the price of homes sold in the first quarter, as these conditions offer a great time to buy,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo.
“The past two quarters have seen an improvement in affordability as mortgage rates remain low,” said NAHB Chief Economist David Crowe. “Eighty-five percent of the metropolitan areas measured experienced an increase in affordability. Along with favorable home prices and pent-up demand, this broad improvement should help encourage more buyers to enter the marketplace.”
In all, 66.5 percent 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 $65,800. This is up from the 62.8 percent of homes sold that were affordable to median-income earners in the fourth quarter.
The national median home price declined from $215,000 in the fourth quarter to $210,000 in the first quarter. Meanwhile, average mortgage interest fell from 4.29 percent to 4.03 percent in the same period.
For the second straight quarter, Syracuse, N.Y. remained the nation’s most affordable major housing market, as 95.6 percent of all new and existing homes sold in the first quarter of 2015 were affordable to families earning the area’s median income of $68,500.
Also ranking among the most affordable major housing markets in respective order were Toledo, Ohio; St. Louis; Akron, Ohio; and Harrisburg-Carlisle, Pa.
Meanwhile, Sandusky, Ohio topped the affordability chart among smaller markets in the first quarter of 2015. There, 96.3 percent of homes sold during the first quarter were affordable to families earning the area’s median income of $69,600. Other smaller housing markets at the top of the index included Cumberland, Md.-W.Va.; Elmira, N.Y.; Davenport-Moline-Rock Island, Iowa-Ill.; and Kokomo, Ind.