May 15, 2015 — Looking for a place to retire where your housing dollar gives you the biggest bang? If so the National Association of Home Builders/Wells Fargo Housing Opportunity Index, which ranks U.S. metros by housing affordability, might just have your answer. All of the top 10 most affordable markets are in the Midwest or Northeast, not such great news for retirees looking to retire in warm weather. The price of homes in these Metros ranges from a low of $75,000 (Springfield, OH) to a high of $105,000 in Sandusky, OH. Another problem with these “most affordable” Metros – none of them has inspired us enough to write them up as interesting places to retire.
Here are the top 10 most affordable housing markets (the number to the right of each Metro is the % of homes affordable for the median income there).
Sandusky, OH 96.3
Cumberland, MD-WV 96.1
Syracuse, NY 95.6
Elmira, NY 94.5
Davenport-Moline-Rock Island, IA-IL 94.4
Kokomo, IN 94.0
Binghamton, NY 93.5
Springfield, OH 93.5
Lima, OH 93.4
Lansing-East Lansing, MI 93.3
You can see how all U.S. Markets stack up for affordability by downloading at the NAHB/Wells Fargo Housing Opportunity Index by Affordability. Note that this list changes quite a bit from quarter to quarter, we were surprised at the movement at the top of this list from late 2014.
Affordable Markets in the Sunbelt
The good news is that there are plenty of markets in the Sunbelt where most of the homes are affordable. Here is a selection of Metros where at least 83% of the homes are considered affordable for the median income in that market (ranked by most affordable):
#43 Odessa, TX
#45 Gainesville, FL
#53 Sherman/Denison, TX
#56 Lakeland/Winter Haven, FL
#57 Tallahassee, FL
#58 Fayetteville, NC
#60 Ocala, FL
#64 Killeen-Temple-Fort Hood, TX
#68 Yuma, AZ
#71 Birmingham/Hoover, AL
#73 Carson City, NV
More about the Housing Affordability Situation
Here is a more detailed explanation of housing affordability from a NAHB press release:
“Consumers benefited from continued low mortgage rates and some fall in the price of homes sold in the first quarter, as these conditions offer a great time to buy,” said Tom Woods, NAHB chairman and home builder from Blue Springs, Missouri.
According to the index, 66.5 percent of new and existing homes that were sold between January and March were affordable to families with a median income $65,800. This was an increase from Q4 results of 62.8 percent of homes sold that were affordable to families with a median income.
“The past two quarters have seen an improvement in affordability as mortgage rates remain low,” said David Crowe, NAHB chief economist. “Eighty-five percent of the metropolitan areas measured experienced an increase in affordability. Along with favorable home prices and pent-up demand, this broad improvement should help encourage more buyers to enter the marketplace.”
The index also revealed that the national median home price dropped from $215,000 in the fourth quarter to $210,000 in the first quarter and the average mortgage interest declined from 4.29 percent to 4.03 percent.
Syracuse, New York was at the top for the nation’s most affordable housing market for the second quarter in a row, the index says. Of all new and existing homes sold, 95.6 percent were affordable to families earning the area’s median income of $68,500. Toledo, Ohio, St. Louis, Missouri, Akron, Ohio, and Harrisburg-Carlisle, Pennsylvania were followed among the most affordable major housing markets.
California was found to be the least affordable housing market in the index.
Comments? What is your experience in the housing market – are prices in your demand going up, staying the same? Are good housing opportunities in the 55+ market tight or in great supply? Please share your experiences in the Comments section below.