Nationwide housing affordability rose in the first three months of 2015 thanks to low interest rates and home prices, according to the newly released National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI).
"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.
The NAHB said that affordability has grown in the last two quarters, spearheaded by metropolitan areas, 85 percent of which showed an increase in that category.
In total, 66.5 percent of new and existing home sales in the first quarter of 2015 were considered affordable to families earning the median U.S. income of $65,800, a 3.7 percent increase from the previous quarter.
During the same time, the national median home price dropped $5,000 to $210,000 quarter over quarter. Average interest rates also fell from 4.29 percent to 4.03 percent.
Syracuse, NY was the most affordable major housing market in the quarter, with Toledo, OH, St. Louis, MO, Akron, OH and Harrisburg-Carlisle, PA rounding out the top five, respectively.
The NAHB compiles the HOI through actual court records and uses the data to measure the percentage of homes sold in an area that are affordable to families who earn the median income in that same area per quarter.
Given the increasing affordability as well as demand, the NAHB expects more buyers to enter the marketplace in the coming months.
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