The housing affordability index measured by the National Association of Home Builders and mortgage lender Wells Fargo hit its highest point ever in the fourth quarter.
The so-called HOI (Housing Opportunity Index) climbed to 73.9 percent during the quarter, meaning nearly three-quarters of families earning the national median income of $64,400 could afford to buy a home.
It surpassed the previous high of 72.5 percent set back in early 2009, and jumped from 72.1 percent in the third quarter of 2010.
“Today’s report shows that housing affordability at the end of 2010 was at its highest level since we started computing the HOI,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB), in a release.
“However, while this is good news for consumers, both home buyers and builders continue to confront extremely tight credit conditions, and this remains a significant obstacle to many potential home sales.”
Indianapolis Most Affordable, NYC Most Expensive
The Indianapolis-Carmel, Indiana metro was the most affordable in the nation during the third quarter, with 93.5 percent of all homes sold considered “affordable” to households earning the area’s median family income of $68,700.
Conversely, the New York-White Plains-Wayne, N.Y.-N.J. metro was again the least affordable in the nation, with just 25.5 percent able to buy on the area’s median income of $65,600.
Of course, now that mortgage rates have risen about a percentage point in the past three months, affordability will likely dip considerably.