Affordable Housing Market Report: Indianapolis on Top

As home loan rates edged downward during the fourth quarter of 2006 and some real estate markets took price hits, affordability improved - albeit only marginally, according to a report released Thursday.

Approximately 41.6 percent of homes sold during the fourth quarter were affordable to Americans earning the median household income of $59,600, according to the Home Opportunity Index, constructed quarterly by the National Association of Home Builders and Wells Fargo.

This compares with 40.4 percent during the third quarter.

NAHB president Brian Catalde, a home builder from Playa del Rey, Calif., attributed the improvement to declining mortgage interest rates toward the end of the year.

Where to buy
The Indianapolis housing market was, once again, the most affordable major housing market in the United States. The median home sold there, already low at $122,000 during the previous quarter, fell to $113,000 during the last three months of the year.

With a median income of $65,000, 89 percent of the homes sold were affordable to the average household.

Other affordable major markets included: Youngstown-Warren-Boardman, Ohio-Pennsylvania.; Detroit-Livonia-Dearborn, Michigan; Toledo, Ohio; and Buffalo-Niagara Falls, New York.

Conversely, those seeking a California mortgage would run into trouble in Los Angeles; it was named the nation’s least affordable market again. Only two percent of the homes sold during the quarter there were affordable to those households bringing home the median earnings for the area, $56,200.

The median sale price was $525,000.

Santa Ana-Anaheim-Irvine, California; San Diego-Carlsbad-San Marcos, California; and New York-White Plains-Wayne, New York joined Los Angeles near the top of the unaffordable list.

SOURCE: CNN Money