U.S. Home Affordability : See Where Your Hometown Ranks
Want to stretch your home-buying dollar? It’s simple. Buy while mortgage rates are low.
Home Affordability Remains Near All-Time Highs
There’a a reason they say “now’s a great time to buy a home”. 73 percent of homes sold last quarter were considered “affordable” to U.S. families earning the national median income of $ 64,200 and, for households earning more than $ 64,200, homes look downright cheap.
For 11th straight quarter last quarter, the national Home Affordability Index surpassed 70 percent. That’s a noteworthy statistic because, prior to the streak, home affordability rarely topped 60 percent nationwide.
The combination of falling home prices and sinking mortgage rates have created a buyer’s market unlike any we’ve seen in history.
And now, with the FHA raising its loan limits to $ 729,750 in places like Alexandria and Fairfax, Virginia; and San Francisco, California, with just a 3.5 percent downpayment, home buyers can take make an offer and take advantage.
Even jumbo mortgages are cheaper than dirt.
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Where Does Your City Rank In Affordability?
For the first time, Fairbanks, Alaska topped the national rankings. 97.8% of homes in the 49th state remain affordable to median income-earning households. Fairbanks has an advantage over other top-ranking cities, though, because its median household income tops $ 91,000.
By contrast, the median household income for the second-ranked city — Kokomo, Indiana — was $ 59,100. That’s a big disparity.
In terms of overall affordability, though, other midwestern cities ranked similarly high :
- Flint, Michigan : 92.1 percent affordability
- Canton, Ohio : 91.4 percent affordability
- Dayton, Ohio : 89.5 percent affordability
- Cincinnati, Ohio : 84.1 percent affordability
- Columbus, Ohio : 79.3 percent affordability
On the opposite end of the affordability scale sits New York-White Plains, NY-Wayne, NJ.
The New York metro region ranked last in home affordability for the 14th straight quarter with just 23% of homes being affordable to families earning the local median income ($ 67,400)
The rankings for all 225 metro areas are available online.
Your Last Chance For Cheap Housing?
Cheap housing is a function of two factors — low home prices and low mortgage rates. Unfortunately, both are running out.
Home supplies are down in most U.S. markets and mortgage rates are poised to rise between now and 2012. ”Affordability” is waning and today’s buyers are learning that the hard way.
The cliche is a tired one, but it really is a great time to buy a home. And refinance one, too.
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