Most affordable housing markets
Midwest cities lead the nation in housing affordability, according to an index by the National Association of Home Builders and Wells Fargo.
By Les Christie, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- When it comes to affordable housing, no region can top the Midwest: Nine of the top ten of the nation's most affordable housing markets are there, according to the latest National Association of Home Builders/Wells Fargo Housing Opportunity Index.

The report said that affordability suffered just a little during the second quarter of 2006, as housing prices stayed about the same but mortgage rates ticked up.

Top 10 most affordable housing markets
All 10 of the nation's most affordable housing markets are in the Midwest. HOI refers to the percentage of homes deemed affordable.
Metro area State HOI Median home price Median income
Springfield OH 91.4 $85,000 $55,400
Bay City MI 91.2 $85,000 $55,800
Lansing MI 90.3 $110,000 $64,900
Saginaw MI 89.0 $85,000 $53,800
Battle Creek MI 88.5 $85,000 $55,200
Indianapolis IN 87.4 $120,000 $65,100
Mansfield OH 87.2 $87,000 $52,700
Canton OH 86.9 $100,000 $54,900
Detroit MI 86.7 $95,000 $56,700
Cumberland MD 86.0 $80,000 $48,400
Source: National Association of Home Builders and Wells Fargo
The least affordable housing markets
All but one of the markets where it's hardest to afford a home are in California. HOI refers to the percentage of homes deemed affordable.
Metro area State HOI Home price Income
Los Angeles CA 1.9 $521,000 $56,200
Santa Ana CA 3.2 $630,000 $78,300
Salinas CA 3.5 $610,000 $62,200
Merced CA 3.6 $376,000 $46,400
Modesto CA 4.1 $380,000 $54,400
San Diego CA 4.6 $490,000 $64,900
Santa Cruz CA 4.8 $702,000 $75,100
Santa Barbara CA 5.3 $549,000 $65,800
Napa CA 5.4 $615,000 $75,000
San Luis Obispo CA 5.9 $550,000 $63,800
New York (tie) NY 5.9 $475,000 $59,200
Source: National Association of Home Builders and Wells Fargo

Indianapolis has retained its status as the most affordable large city in the United States for home buyers and Springfield, Ohio was No. 1 when smaller cities were included in the rankings.

About 40 percent of homes in the United States were deemed affordable to families earning the national median income of $59,600. That was down from 41.3 percent in the first quarter.

The index tries to capture a snapshot of affordability by calculating housing expenses and comparing them to income. Housing expenses include property taxes and insurance as well as the mortgage payment. The formula calls for all that to be no more than 28 percent of income.

The final index number is the percentage of homes sold during the quarter that families earning the median income could afford to buy.

In Indianapolis, 87.4 percent of all the homes sold there during the second quarter were affordable to anyone earning metro area's median household income, $65,100. The median price for a home was $120,000.

Contrast that with the Los Angeles /Long Beach/Glendale housing market, the nation's least affordable, where just 2 percent of all the homes sold during the quarter were affordable for those earning the median family income of $56,200. The median home in Los Angeles costs $521,000.

Other major metro areas suffering severe affordability problems were Santa Ana/Anaheim and San Diego, in California, and the New York metro area.

Smaller unaffordable metro areas include Salinas, Merced and Modesto, all Golden State cities.

The most affordable markets were located mostly in the Midwest. Detroit/Livonia/Dearborn, Michigan; Grand Rapids/Wyoming, Michigan and Buffalo/Niagara Falls, New York led the way.



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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.