Lower Prices Mean Homes Are More Affordable in Some U.S. Cities
- May 21, 2008
Washington, D.C.–Because home prices are falling, home affordability has increased dramatically in many parts of the U.S., according to the Housing Opportunity Index released Tuesday by Wells Fargo and the Washington, D.C.-based National Association of Home Builders.Families with a median household income of $61,500 could afford 53.8 percent of all new and pre-existing homes sold during the first three months of this year, CNNMoney.com said–an increase from 44 percent in the first three months of 2007. Home prices in general haven’t been so affordable since June 2004. Indianapolis, Ind., was ranked as the most affordable market; Los Angeles is the least affordable metro area, according to the NAHB.But even though prices fell roughly 8 percent compared to 2007, consumers are still hesitant to buy homes because they know the market is declining.Low buyer confidence can further slow the market and cause prices to slide lower than their typical bottoming-out point, according to Dave Seiders, NAHB’s chief economist.