Sunday, February 21, 2010
Housing Affordability at Near Record Level
(photo of Levittown model home)
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. By comparison, only 55% were affordable in the second quarter of 2008.
The National Association of Home Builders judges a home to be affordable if a family making the 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. 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%. The least affordable city? New York, at 20%.