Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Nearly 75% of all U.S. homes are affordable

indianapolis_in_mass_ave.top.jpgIndianapolis is the most affordable city in the country - a post it's held for four years.By Les Christie, staff writer

NEW YORK (CNNMoney.com) -- An amazing turnabout in the U.S. housing market over the past four years has pushed home prices to near record levels of affordability.

The typical American family, who makes the nation's median income of $64,000 a year, could afford to buy 70.8% of all homes sold in the United States during the last three months of 2009, according a quarterly report from the National Association of Home Builders and Wells Fargo (WFC, Fortune 500).

That's off just a tad from the record 72.5% reached during the first three months of 2009, but up substantially from the second quarter of 2008 when only 55% of homes sold were affordable.

"Favorable mortgage rates and sliding house prices that have now started to stabilize nationally have both contributed to a record year for housing affordability in 2009," said NAHB chairman Bob Jones, a home builder from Bloomfield Hills, Mich.

The NAHB judges a home to be affordable if a family making the metro area's median income could devote no more than 28% of their take-home pay toward housing costs.

There was a huge variation in affordability around the nation. As a rule, Midwestern cities far outperformed coastal communities.

All five of the most affordable major housing markets were in the Rust Belt, led by Indianapolis, which has been the nation's most affordable major metro area for more than four years. More than 95% of all home sold there were classed as within the budget.

Detroit was the second most affordable major market with 93.4%, followed by three Ohio cities, Dayton (93.2%), Youngstown (93%) and Akron (92.2%).

A few small cities surpassed even Indianapolis. In Kokomo, Ind., 98% of homes sold were priced low enough for median-income families to afford. Monroe (97.1%) and Flint (96.3%) both scored high as well.

New York was the least affordable market; less than 20% of homes met the criteria. San Francisco (22.3%), Honolulu (33.8%), Santa Ana, Calif.,. (34.5%) and Los Angeles (36.8%) filled out the bottom five.

The most unaffordable small market was San Luis Obispo in California, where only 32% of homes sold were attainable for median-income families. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.93%3.86%
15 yr fixed2.99%3.02%
5/1 ARM3.26%3.20%
30 yr refi3.98%3.92%
15 yr refi3.05%3.06%
Rate data provided
by Bankrate.com
View rates in your area
Find personalized rates:
Index Last Change % Change
Dow 17,837.04 24.85 0.14%
Nasdaq 5,113.02 10.21 0.20%
S&P 500 2,090.98 1.84 0.09%
Treasuries 2.23 -0.01 -0.62%
Data as of 10:00am ET
Company Price Change % Change
HP Inc 12.62 -2.02 -13.80%
General Electric Co 30.31 -0.35 -1.14%
Bank of America Corp... 17.50 0.03 0.14%
Hewlett Packard Ente... 14.59 0.90 6.57%
Pfizer Inc 32.48 0.51 1.58%
Data as of 9:46am ET


The financial deck appears to be stacked against blacks and Hispanics in America. They earn considerably less. They are more likely to be unemployed or in poverty and they are less likely to own a home. Yet despite all this, blacks and Hispanics are far more optimistic about being able to live the American Dream these days than whites. More

Watsi crowdfunds donations to cover healthcare costs of those in need. And it's seeing a surprising trend: micro-donations via the popular Chinese social networking app, WeChat. More

Some of the coolest toys this year are from small businesses. Here are 10 hot toys that just might be a smash hit this holiday season. More

Your new credit card might be safer, but it could lead to more headaches at the check-out line this holiday season. More