The residential market experienced a spike in housing affordability during the third quarter, according to property data from the National Association of Home Builders and Wells Fargo.
Real estate records showed that slightly more than 74 percent of homes were considered to be affordable for families earning at least $65,000, which is the median household income nationwide. The figure was higher than the second quarter's level, which was 73.8 percent, according to the Housing Opportunity Index from the two firms.
"The latest housing affordability data is good news on two fronts, because it shows that the share of homes affordable to median-income earners has risen even as home prices have continued to gradually recover from their recession lows," said Barry Rutenberg, chairman of the NAHB. "That said, given today's overly tight lending conditions, we know that it remains very difficult for potential buyers to qualify for and obtain those great rates."
MSAs show varying affordability
Multiple areas had quite affordable homebuying levels during the third quarter. According to the report, Fairbanks, Alaska, was the most affordable metropolitan statistical area, with 99.4 percent of its homes sold during those three months considered to be affordable for the median income of approximately $93,000.
For large housing markets, Ogden-Clearfield, Utah, had the best home affordability situation, the report explained. The MSA had more than 93 percent of all homes sold during the quarter affordable for the median income of $71,500. Multiple other markets registered highly affordable purchase levels, as Indianapolis-Carmel, Indiana; Lakeland-Winter Haven, Florida; and Toledo, Ohio, all made the list.
The least affordable large market on the list was New York-White Plains-Wayne, New York-New Jersey, the report noted. This area has a median income of $68,300, but fewer than 30 percent of the homes sold in the area were considered affordable. Additionally, the small housing category had Santa Cruz-Watsonville, California, as the least affordable market. Only 44.4 percent of properties sold were affordable, as the median income was $87,000.
With more consumers experiencing improved affordability during the third quarter, this may have increased the level of home sales in October. According to the National Association of Realtors, existing-home sales rose 2.1 percent during the month, as well as nearly 11 percent from the same month in 2011.