San Francisco is no longer the least-affordable housing market.
According to the National Association of Home Builders (NABH)/ Wells Fargo Housing Opportunity Index (HOI), Los Angeles has gained the top spot as the least affordable market in the nation. San Francisco held that designation for the previous five years.
In the Los-Angeles-Long-Beach-Glendale, Calif., just 9.1% of the homes sold during the third quarter were affordable to families earning the area’s median income of $64,300.
The latest HOI Index also indicated that 58.3% of new and existing homes sold between July and the end of September 2017 were affordable to families earning the U.S. median income of $68,000. That’s from the 59.4% of homes sold that were affordable to median-income earners in the second quarter, according to the NAHB.
"Solid economic growth, along with ongoing quarterly job gains and rising household formations, are fueling housing demand.”The national median home price rose to $260,000 in the third quarter from $256,000 in the second quarter of 2017. At the same time, average mortgage rates inched up two basis points in the third quarter to 4.1% from 4.08 percent in the second quarter.
“Though builder confidence remains strong, they continue to deal with the long-term repercussions of this devastating hurricane season, which has exacerbated chronic labor and lot shortages and put upward pressure on material and home prices,” said NAHB chairman Granger MacDonald, a home builder and developer from Kerrville, Texas.
“Solid economic growth, along with ongoing quarterly job gains and rising household formations, are fueling housing demand,” said NAHB Chief Economist Robert Dietz. “Tight inventories and a forecast of rising mortgage interest rates through 2018 will keep home prices on a gradual upward path and slowly lessen housing affordability in the quarters ahead.”
The Youngstown-Warren-Boardman, Ohio-Pa. market has been rated as the nation’s most affordable major housing market for the fourth consecutive quarter. About 90% of all new and existing homes sold in the third quarter were affordable to families earning the area’s median income of $54,600. Wheeling, W.Va.-Ohio, was rated the nation’s most affordable smaller market, with 94.7% of homes sold in the third quarter being affordable to families earning the median income of $56,100.
Rounding out the top five affordable major housing markets in respective order were Syracuse, N.Y.; Scranton-Wilkes Barre-Hazleton, Pa.; Indianapolis-Carmel-Anderson, Ind.; and Wilmington, Del.-Md.-N.J., which tied for the fifth spot with Cincinnati, Ohio-Ky.-Ind.
The five least-affordable small housing markets are all in the Golden State. At the very bottom of the affordability chart was Salinas, where 11.3% of all new and existing homes sold were affordable to families earning the area’s median income of $63,100.