NAHB: Housing Affordability Improves Nationally, but Falls in Greenville

Lower interest rates and home prices contributed to a solid boost in nationwide affordability in the first quarter of 2015, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI) released today.

“Consumers benefited from continued low mortgage rates and some fall in the price of homes sold in the first quarter, as these conditions offer a great time to buy,” said NAHB Chairman Tom Woods.

In Greater Greenville, the index fell from 80.4% during the fourth quarter of 2014 to 77.7% in the first quarter of 2015.  Like the nation, house prices dropped to $154,000 from $161,000, and income also fell slightly to $58,000.  As a result, Greater Greenville's national rank as most affordable among all housing markets fell from 64th in the fourth quarter to 107th last quarter.  Greenville is now 32nd in the Southeast, off from 13th in the fourth quarter.

Meanwhile, Charleston's affordability continued to improve as income rises in that market.  Charlotte's affordability also improved, again the result of rising wages.  Atlanta's affordability also improved on rising wages.

“The past two quarters have seen an improvement in affordability as mortgage rates remain low,” said NAHB Chief Economist David Crowe. “Eighty-five percent of the metropolitan areas measured experienced an increase in affordability. Along with favorable home prices and pent-up demand, this broad improvement should help encourage more buyers to enter the marketplace.”

In all, 66.5% of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $65,800. This is up from the 62.8% of homes sold that were affordable to median-income earners in the fourth quarter.

The national median home price declined from $215,000 in the fourth quarter to $210,000 in the first quarter. Meanwhile, average mortgage interest fell from 4.29% to 4.03% in the same period.

For the second straight quarter, Syracuse, N.Y. remained the nation’s most affordable major housing market, as 95.6% of all new and existing homes sold in the first quarter of 2015 were affordable to families earning the area’s median income of $68,500.

Also ranking among the most affordable major housing markets in respective order were Toledo, Ohio; St. Louis; Akron, Ohio; and Harrisburg-Carlisle, Pa.

Meanwhile, Sandusky, Ohio topped the affordability chart among smaller markets in the first quarter of 2015. There, 96.3% of homes sold during the first quarter were affordable to families earning the area’s median income of $69,600. Other smaller housing markets at the top of the index included Cumberland, Md.-W.Va.; Elmira, N.Y.; Davenport-Moline-Rock Island, Iowa-Ill.; and Kokomo, Ind.

For a 10th consecutive quarter, San Francisco-San Mateo-Redwood City, Calif. was the nation’s least affordable major housing market. There, just 14.1% of homes sold in the first quarter were affordable to families earning the area’s median income of $103,400.

Other major metros at the bottom of the affordability chart were Los Angeles-Long Beach-Glendale, Calif.; Santa Ana-Anaheim-Irvine, Calif.; New York-White Plains-Wayne, N.Y.-N.J.; and San Jose-Sunnyvale-Santa Clara, Calif.

All five least affordable small housing markets were in California. At the very bottom was Santa Cruz-Watsonville, where 21.6% of all new and existing homes sold were affordable to families earning the area’s median income of $87,000. Other small markets included Salinas, Napa, San Luis Obispo-Paso Robles, and Santa Barbara-Santa Maria-Goleta; in descending order.

Please visit nahb.org/hoi for tables, historic data and a complete listing of markets sorted alphabetically or ranked by affordability.