Home affordability reached an all-time high in 2010’s last quarter. Unfortunately for home buyers in AZ , it’s been a different story since, however.
As mortgage rates cratered, and with home values soft, the Home Opportunity Index reached its highest level in 20 years. The index is published by the National Association of Home Builders.
Close to 74 percent of the new and existing homes sold between October-December 2010 were affordable to families earning the national median income of $64,400. It’s the 8th straight quarter in which the Home Affordability Index surpassed 70 percent.
Prior to 2009, the HOI rarely topped 65 percent.
That said, though, as with everything in real estate, home affordability is a local event. For example, take the Elkhart/Goshen area of northern Indiana. 97 percent of homes sold there last quarter were affordable to families making the area’s median income.
This level of affordability is likely related to state capital Indianapolis, a perennial top-scorer itself.
For the second straight quarter — and the 22nd time dating back to 2006 — Indianapolis led all major metropolitan areas with a 93.5 affordability rating.
Meanwhile, on the opposite end of the home affordability spectrum, the “Least Affordable Major City” title went to the New York-White Plains, NY-Wayne, NJ area for the 11th consecutive quarter. Just 25.5 percent of homes were affordable to households earning the area median income.
It’s a a 6-point improvement from Q2 2010, however.
The rankings for all 225 metro areas are viewable on the NAHB website but regardless of where you live, it’s important to remember that rising mortgage rates this year have made homes less affordable in all markets across the United States. We won’t see a repeat record in this quarter’s HOI once it’s calculated and published.
Home buyers in Scottsdale have lost 10% of their purchasing power since November, and mortgage rates look poised to rise even more.
If your plans call for buying a home later this year, consider moving up your time frame. The long-term costs of homeownership are rising, and affordability, therefore, is falling.
Mark Taylor | Arizona Home Loans | Blarming | Will You Listen to Me | Arizona Short Sales | Arizona Foreclosures | Arizona FHA Loans | Arizona USDA Loans | Real Estate Websites | Arizona HUD Homes | Ariona VA Loans | Fix My Broken Credit | Arizona Mortgage | Arizona Short Sale | Power Ranch Bank Owned Homes
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