Most affordable housing markets

Lower mortgage rates and home values help overall affordability. Indianapolis holds top spot. Just 2% of homes in L.A. deemed within reach.

By Les Christie, staff writer

NEW YORK ( -- As mortgage rates edged downward during the fourth quarter of 2006 and some real estate markets took price hits, affordability improved - albeit only marginally, according to a report released Thursday.

Some 41.6 percent of homes sold during the fourth quarter were affordable to Americans earning the median family income of $59,600, according to the Home Opportunity Index, constructed quarterly by the National Association of Home Builders and Wells Fargo.

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That compares with 40.4 percent during the third quarter.

NAHB president Brian Catalde, a home builder from Playa del Rey, Calif., attributed the improvement to declining interest rates toward the end of the year.

Indianapolis was, once again, the most affordable major housing market in the United States. The median home sold there, already low at $122,000 during the previous quarter, fell to $113,000 during the last three months of the year. With a median income of $65,000, 89 percent of the homes sold were affordable to the average family.

Other affordable major markets included: Youngstown-Warren-Boardman, Ohio-Pennsylvania.; Detroit-Livonia-Dearborn, Michigan; Toledo, Ohio; and Buffalo-Niagara Falls, New York.

The Los Angeles metro area was again the nation's least affordable market. Only 2 percent of the homes sold during the quarter there were affordable to those families bringing home the median earnings for the area, $56,200. The median sale price was $525,000.

Santa Ana-Anaheim-Irvine, California; San Diego-Carlsbad-San Marcos, California; and New York-White Plains-Wayne, New Jersey joined Los Angeles near the top of the unaffordable list.

Most affordable
City State Price Income
Indianapolis IN $113,000 $65,100
Youngstown OH $83,000 $52,100
Detroit MI $92,000 $56,700
Toledo OH $105,000 $58,900
Buffalo NY $89,000 $58,300
Dayton OH $100,000 $59,800
Grand Rapids MI $124,000 $61,500
Akron OH $101,000 $61,300
Rochester NY $111,000 $64,100
St Louis MO $124,000 $65,800
Least affordable
City State Price Income
Los Angeles CA $525,000 $56,200
Santa Ana CA $620,000 $78,300
San Diego CA $475,000 $64,900
New York NY $500,000 $59,200
Modesto CA $360,000 $54,400
Riverside CA $391,000 $57,500
Stockton CA $415,000 $57,100
San Francisco CA $750,000 $91,200
Fresno CA $293,000 $47,000
Sacramento CA $370,000 $65,400
Source:National Association of Home Builders and Wells Fargo