Indianapolis remains most affordable housing market
Indianapolis remained the most affordable major U.S. housing market for the ninth consecutive time in the third quarter of 2007, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), released Nov. 27.
Meanwhile, nationwide housing affordability rose on a year-over-year basis but was down slightly for the quarter due to higher mortgage rates.
“Today’s HOI reading indicates that 42 percent of all new and existing homes that were sold during the third quarter were affordable to families earning the national median income of $59,000,” said NAHB president Brian Catalde, a home builder from El Segundo, Calif. “This reflects a slight improvement in affordability from a year ago, when only 40.4 percent of homes were within reach of median income-earners, but is just below the 43.1 percent of homes that were affordable to median income-earners in this year’s second quarter.”
The HOI indicates that the national weighted interest rate on fixed and adjustable-rate mortgages — a key component in calculating the HOI — was 6.73 percent in the third quarter, compared to 6.44 percent in the second quarter.
In the nation’s most affordable major housing market of Indianapolis, 87.5 percent of homes sold in the third quarter were affordable to families earning the area’s median household income of $63,800. Also near the top of the list for affordable major metros this quarter were Detroit-Livonia-Dearborn, Mich.; Youngstown-Warren-Boardman, Ohio-Pa.; Scranton-Wilkes-Barre, Pa.; and Grand Rapids-Wyoming, Mich.
On the flip side, Los Angeles-Long Beach-Glendale, Calif., was the nation’s least-affordable major housing market for the 12th consecutive quarter. Just 3.7 percent of new and existing homes in that area sold during the third quarter were affordable to those earning the area’s median family income of $61,700.
Other major metros at the bottom of the housing affordability chart included Santa Ana-Anaheim-Irvine, Calif.; San Francisco-San Mateo-Redwood City, Calif.; New York-White Plains-Wayne, N.Y.-N.J.; and Nassau-Suffolk, N.Y.
Wal-Mart eyes big investment in Brazilian market
Retail giant Wal-Mart has announced a planned increased investment in the Brazilian market, to the tune of $649 million.
In a news conference held this week in Brasilia, Brazil, Vincente Trius, CEO of Wal-Mart’s Brazilian unit, said, “We are very committed to growth in Brazil. It is a strategic market for Wal-Mart. Brazil has increased in importance for us in the last few years.”
Wal-Mart’s competitors in Brazil include French retail chain Carrefour and Brazil’s Companhia Brasileira de Distribuicao. Wal-Mart has other lower-end banners in the country, including Todo Dia and Maxxi. The new Brazilian stores reportedly will be in various formats, including hypermarkets, supermarkets and wholesale outlets.
Wal-Mart operates in several countries in South and Central America, including Argentina, Brazil, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.
Median home prices higher or stable in third quarter
Median home, condo and co-op prices rose or remained stable in most metropolitan areas in the third quarter compared to a year ago, according to the latest report on median home prices by the National Association of Realtors.
Despite a broad decline in existing-home sales, 93 out of 150 metropolitan statistical areas showed increases in median existing single-family home prices from a year earlier. Six areas showed double-digit annual gains, 21 showed increases of 6 percent or more, 54 had price declines and three were unchanged.
The national median existing single-family home price declined 2 percent in the quarter — from $225,300 to $220,800 — impacted by a disruption in higher priced sales.
Regionally, the median existing single-family home price in the Northeast rose 3.2 percent to $286,300 in the third quarter from the same period in 2006. In the Midwest, the median existing single-family home price increased 0.5 percent to $170,800 in the third quarter from the same period in 2006.
The median existing single-family home price in the South was $180,800 in the third quarter, which is 3.6 percent below a year earlier. The median existing single-family home price in the West was $338,100 in the third quarter, down 3.8 percent from a year ago.
The condo sector, including metro area condominium and cooperative prices — covering changes in 59 metro areas — showed the national median existing condo price was $226,900 in the third quarter, up 2 percent from $222,500 in the third quarter of 2006. Forty-one metros showed annual increases in the median condo price, including six areas with double-digit gains; 18 areas had price declines.
“Some metro areas are hot, while others are experiencing localized problems,” said NAR chief economist Lawrence Yun. “The report also shows that home prices in the vast midsection of America — from the Appalachians to the Rockies — are affordable and, perhaps, even undervalued.”