Tuesday, June 18, 2013

NAHB: Housing affordability up in Colo Springs, Ft. Collins, and Pueblo, but down in Boulder, Denver and Greeley

According to the National Association of Home Builders, housing affordability (for purchase housing), rose in Colorado Springs, the Ft. Collins area, and in Pueblo, while affordability fell in Boulder, the Denver area, and Greeley. (The Grand Junction area was not included in the survey.) 

The NAHB's affordability index is a measure of how many households in a given area can afford the median-priced home in the area.

The index for each metro area over the past five quarters was:

Q1_12 Q2_12 Q3_12 Q4_12 Q1_13
Boulder Housing Opportunity Index 69.2 71.6 71.7 70.7 70.7
Colorado Spr Housing Opportunity Index 87.5 84.6 86.7 82.1 85.1
Denver-Aurora Housing Opportunity Index 80.1 76.8 78.1 79 76.6
Ft Collins Housing Opportunity Index 83.6 83.9 85.4 85.5 86.1
Greeley Housing Opportunity Index 83.2 85.6 86.3 86 85.7
Pueblo Housing Opportunity Index 91 90.5 93 88.9 89.5

The graph shows the index value for each metro area since 1999:


Mot surprisingly, Boulder was the least affordable metro area, according to the study, while the Pueblo area was the most affordable.

Much of the increase in affordability since 2009 has been driven by continually declining mortgage rates.

Several Colorado metros showed a higher affordability index than the nation overall, which, according to the NAHB, was 73.7 nationwide.

According to the press release:

Housing Affordability Holding Strong in Early 2013
WASHINGTON, May 14 - Nationwide housing affordability held near historic highs in this year's first quarter, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), released today. 
In all, 73.7 percent of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $64,400. This is down slightly from the 74.9 percent of homes sold that were affordable to median-income earners in the final quarter of 2012.

"Thanks to very favorable mortgage rates and prices, housing affordability has remained quite high over the past four years," observed NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. "The HOI has not slipped below 70 since the end of 2008. That said, from a builder's perspective, it should be noted that rising costs for building materials, lots and labor are making it somewhat more expensive to construct new homes in today's market." 
"HOI results for the beginning of 2013 are little changed from what they were at the end of 2012, with Ogden-Clearfield Utah holding onto the title of the nation's most affordable major housing market and San Francisco-San Mateo-Redwood City, Calif. retaining its position as the least affordable major market," noted NAHB Chief Economist David Crowe. "The bottom line is that, for consumers who can qualify for a mortgage at today's attractive rates, the majority of homes being sold remain within their grasp in markets nationwide." 
This was the third consecutive quarter in which Ogden-Clearfield hit the top of the affordability chart for major markets. There, 93.4 percent of all new and existing homes sold in this year's first quarter were affordable to families earning the area's median income of $70,800 - essentially unchanged from the 93.7 percent of homes affordable to median-income earners at year-end 2012. 
Other major U.S. housing markets at the top of the affordability chart in the first quarter included Indianapolis-Carmel, Ind.; Lakeland-Winter Haven, Fla.; Youngstown-Warren-Boardman, Ohio-Pa.; and the two New York metros of Syracuse and Albany-Schenectady-Troy tied for the fifth position. 
Among smaller housing markets, Mansfield, Ohio, claimed the "most affordable" title this time around, with 97.5 percent of homes sold in the first quarter being affordable to those earning the median income of $54,600. Other small housing markets at the top of the index included Cumberland, Md.-W.Va., followed by Fairbanks, Alaska; Springfield, Ohio; and Dover, Del., respectively. 
This was the second consecutive quarter in which the San Francisco-San Mateo-Redwood City, Calif. metro area hit the bottom of the affordability chart for major markets. There, just 28.9 percent of homes sold in the first quarter were affordable to families earning the area's median income of $102,000. 
Other major metros at the bottom of the affordability chart included New York-White Plains-Wayne, N.Y.-N.J. and the three California metros of Santa Ana-Anaheim-Irvine; Los Angeles-Long Beach-Glendale; and San Jose-Sunnyvale-Santa Clara, in that order.
The least affordable small housing market in the first quarter was Santa Cruz-Watsonville, Calif., where 37.1 percent of all new and existing homes sold were affordable to those earning the area's median family income of $73,800. Other small metros at the bottom of the affordability chart included Salinas, Calif.; San Luis Obispo-Paso Robles, Calif.; and Ocean City, N.J.; followed by the metros of Santa Barbara-Santa Maria-Goleta and Napa, Calif., which tied for fifth place. 
Please visit www.nahb.org/hoi for tables, historic data and details.
Editor's Note:  The NAHB/Wells Fargo Housing Opportunity Index (HOI) is a measure of the percentage of homes sold in a given area that are affordable to families earning the area's median income during a specific quarter. Prices of new and existing homes sold are collected from actual court records by Core Logic, a data and analytics company. Mortgage financing conditions incorporate interest rates on fixed- and adjustable-rate loans reported by the Federal Housing Finance Agency. 
The NAHB/Wells Fargo HOI is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public.