Affordability Slips as Home Values Strengthen
Nationwide housing affordability slipped several notches as recovering markets witnessed significant firming of home prices in the second quarter, according to theNAHB/Wells Fargo Housing Opportunity Index (HOI), released on Aug. 13. spacer
Most and Least Affordable Metros Ranked
While Ogden-Clearfield, Utah, was rated the nation’s most affordable major housing market for a fourth consecutive quarter, a newcomer – Utica-Rome, N.Y. – claimed the title of most affordable smaller market in the latest HOI. Other major U.S. housing markets at the top of the affordability chart in the second quarter included Indianapolis-Carmel, Ind.; Harrisburg-Carlisle, Pa.; Youngstown-Warren-Boardman, Ohio-Pa.; and Buffalo-Niagara Falls, N.Y., in descending order. Meanwhile, smaller markets joining Utica at the top of the affordability chart included Kokomo, Ind.; Cumberland, Md.-W.V.; Vineland-Millville-Bridgeton, N.J.; and Bay City, Mich.
For a third consecutive quarter, San Francisco-San Mateo-Redwood City, Calif. held the lowest spot among major markets on the affordability chart. Other major metros at the bottom included 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.; in descending order. All of the least affordable small housing markets were in California in the latest quarter. At the very bottom was Santa Cruz-Watsonville, followed by San Luis Obispo-Paso Robles, Salinas, Napa and Santa Rosa-Petaluma.
Builders More Confident for Fourth Consecutive Month
Builder confidence in the market for newly built, single-family homes rose three points to 59 on the NAHB/Wells Fargo Housing Market Index (HMI) for August, released on Thursday. This fourth consecutive monthly gain brings the index to its highest level in nearly eight years. Of the HMI’s three component indexes, the one gauging current sales conditions rose three points to 62, while the one gauging sales expectations in the next six months gained a single point to 68 and the one gauging traffic of prospective buyers held unchanged at 45. Additionally, all but one region saw a gain in its three-month moving average HMI score in August.
The Midwest and West each posted six-point increases, to 60 and 57, respectively, while the South posted a four-point gain to 54 and the Northeast held unchanged at 39. Commenting on the latest survey, NAHB Chief Economist David Crowe explained, "Builder confidence continues to strengthen along with rising demand for a limited supply of new and existing homes in most local markets." However, he added, "This positive momentum is being slowed by the ongoing headwinds of tight credit and inadequate supplies of finished lots and labor.”
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- Joanne Loftus