House Prices Sustain Affordability
The National Association of Home Builders keeps a running “journal” of home affordability throughout the United States. They do this in conjunction with Wells Fargo Bank, and the result is a quarterly report called the NAHB/Wells Fargo Housing Opportunity Index (HOI). This particular index is a measure of the percentage of homes sold in a given area that are affordable to families earning the area’s median income during a specific quarter. The information is collected from the recorded mortgages – which is public information – by Core Logic, a research and statistical analysis company. Any information gathered on interest rates is done so through the Federal Housing Finance Agency.
According to the HOI, home affordability in 2013 remains on the upswing as 73.7% of new and existing homes sold in the first quarter were affordable to a family making the national median income of $64,400. This income is an average of the median incomes of individual cities throughout the United States.
Interestingly, Ogden-Clearfield, UT has had the most affordability in new and existing home prices for 3 quarters running with 93.4% sold to families of a median income of $70,800. Unfortunately, San Francisco-San Mateo-Redwood City, CA has had the least affordability coming in at just 28.9% affordability based on a median income of $102,000.
Many reasons are given for the current home affordability including stabilizing home prices, super low interest rates, and the “buyer’s market” during and after the Recession as the housing market slowly recovers from the 2008 crash. One factor that may cause the affordability percentage to stagnate is that the cost of building a new home has gone up with rising gas and oil prices as well as current inflation. Housing materials cost more than they did even 3 years ago, and the president of the NAHB does not see them coming down any time soon.
However, affordability is always something to celebrate, and the home buyers at The Parks of Plaquemines in New Orleans have prices to be happy about. They have shown us this by helping us sell out Phase I of all of the lots in our garden home section of our subdivision – The Villas. Our Traditional Lots are also selling well, and new homes are being contracted to build every quarter. Come out and see what all the fuss is about!! Call 504-364-2350 or E-mail [email protected] to get more information on taking a tour of our community.