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.
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.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.53%||4.43%|
|15 yr fixed||3.96%||3.89%|
|30 yr refi||4.53%||4.43%|
|15 yr refi||3.94%||3.87%|
Today's featured rates:
JCPenney CEO Marvin Ellison, one of only three black CEOs in Fortune 500, jumps ship to lead Lowe's. More
Failing a drug test used to automatically disqualify workers at Belden, an Indiana-based manufacturer. Now, they have another option. More
Mark Zuckerberg is set to be grilled by European lawmakers on Tuesday. Here is what you need to know. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
Is that milestone birthday approaching? Here are some money moves to make before you get there. More