Slightly lower median home prices, along with a small uptick in mortgage rates, contributed to housing affordability holding steady in the fourth quarter of 2013, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), released Thursday. In all, 64.7 percent of new and existing homes sold between the beginning of October and the end of December were affordable to families earning the U.S. median income of $64,400. This is virtually the same as the 64.5 percent of homes sold that were affordable to median-income earners in the third quarter. Meanwhile, the national median home price dipped from $211,000 in the third quarter to $205,000 in the fourth quarter, while average mortgage interest rates rose from 4.45 percent to 4.54 percent in the same period.
"Housing affordability is stabilizing at a time when pent-up demand and ongoing job growth are helping housing markets across the nation to gradually strengthen," NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del., said in a statement "While this bodes well for housing in 2014, builders continue to face challenges, including tight credit for home buyers, inaccurate appraisals, and a shortage of workers and buildable lots."
The nation's most affordable housing market was in the Youngstown-Warren, Ohio, and Boardman, Pa., areas, where 89.4 percent of all new and existing homes sold in last year's fourth quarter were affordable to families earning the area's median income of $53,900. Kokomo, Ind., claimed the title of most affordable smaller market, with 96.3 percent of homes sold in the fourth quarter being affordable to those earning the median income of $60,100. Other major U.S. housing markets at the top of the affordability chart in the fourth quarter included Harrisburg-Carlisle, Pa.; Syracuse, N.Y.; Buffalo-Niagara Falls, N.Y.; and Scranton-Wilkes-Barre, Pa. Smaller markets joining Kokomo at the top of the affordability chart included Springfield, Ohio; Monroe, Mich.; and Vineland-Millville-Bridgeton, N.J. For a fifth consecutive quarter, the San Francisco-San Mateo-Redwood City, Calif., area held the lowest spot among major markets on the affordability chart. There, just 14.1 percent of homes sold in the fourth quarter were affordable to families earning the area's median income of $101,200.
