The index, which factors in median home price, median family income, and current mortgage interest rates, is the latest in a long line of reports and studies suggesting rising affordability in prominent housing markets.
On August 10, the Washington Center for Real Estate Research, an institute that studies the state’s housing markets, announced that Washington homes are the most affordable they have ever been since the Center began tracking home values in 1994. In King County, for instance, home prices are down 7.2 percent from last year.
The California Association of Realtors announced similar findings on August 11, noting that 51 percent of California households could afford a single-family home in the second quarter, an increase of 5 percent from 2010. Numbers vary across the state, but in some regions, growth is even more impressive. In Sacramento County, for instance, 72 percent of households can now afford a single-family home, up from 65 percent a year ago.
There have also been substantial findings about home values in the Midwest. In May, the Illinois Association of Realtors specifically cited affordability in its first-quarter report, stating that 70 percent of home sales in the first quarter were for homes less than $200,000.
Furthermore, the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), published most recently in late May, reported its highest level of affordability in the 20 years of the index. Midwest communities such as Youngstown, Ohio; Indianapolis-Carmel, Ind.; Farmington Hills, Mich.; Toledo, Ohio; and Kokomo, Ind. (where an astounding 98.6 percent of the homes sold were affordable).
Bob Nielsen, the chairman of the National Association of Home Builders, commented on the recent trend of affordability: “With interest rates remaining at historically low levels, today’s report indicates that homeownership is within reach of more households than it has been for more than two decades.”