California is home to 20 of the 21 least affordable housing markets in the nation, according to a quarterly real estate index released today.

The Los Angeles-Long Beach-Glendale metro area ranked as the least affordable market in the second quarter, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.

The Santa Ana-Anaheim-Irvine, Calif., metro area was second, followed by Salinas; Merced; Modesto; San Diego-Carlsbad-San Marcos; Santa Cruz-Watsonville; Santa Barbara-Santa Maria; Napa; and San Luis Obispo-Paso Robles — all in California.

“The report paints an increasingly gloomy picture for California families trying to buy a home — particularly families trying to buy their first home,” stated Layne Marceau, chairman of the California Building Industry Association. California’s home-ownership rate is 57 percent, 13 points below the rest of the nation, the association noted.

The National Association of Home Builders reported that Indianapolis, Ind., remained the most affordable major U.S. housing market for the fourth consecutive quarter.

The index is a measure of the percentage of homes sold in a given area that are affordable to families earning that area’s median income during a specific quarter. Prices of new and existing homes sold are collected from actual court records by First American Real Estate Solutions, a marketing company. Mortgage financing conditions incorporate interest rates on fixed-rate and adjustable-rate loans reported by the Federal Housing Finance Board, the association announced.

For a given area, the index score is defined as the share of homes sold in that area that would have been affordable to a family earning the local median income based on standard mortgage underwriting criteria.

About 41.6 percent of new and existing homes that were sold during the second quarter were affordable to families earning the national median income of $59,600, according to a statement by David Pressly, president of the National Association of Home Builders.

“This is just below the 41.3 percent of homes that were affordable to median-income earners in the first quarter and tied to the somewhat higher mortgage rates that prevailed in the April through June period,” he stated. The national weighted interest rate on fixed- and adjustable-rate mortgages was 6.65 percent in the second quarter, compared with 6.39 percent in the first quarter.

And roughly half of the markets received an index rating higher than 50, meaning that more than half of the homes in the area were affordable to families earning the area’s median income.

In the nation’s most affordable major housing market of Indianapolis, 87.4 percent of homes sold in the second quarter were affordable to families earning the area’s median household income of $65,100. The median sales price of all homes sold in Indianapolis during that time was $120,000, which is up from $113,000 in the previous quarter and equivalent to the median sales price for Indianapolis homes sold in fourth-quarter 2005, the association reported.

Also near the top of the list for affordable major metros this time around were Detroit-Livonia-Dearborn, Mich.; Grand Rapids-Wyoming, Mich.; Buffalo-Niagara Falls, N.Y.; and Youngstown-Warren-Boardman, Ohio-Pa., in that order.

Five smaller metro markets outranked all others in terms of housing affordability during the second quarter, including Springfield, Ohio, as well as four Michigan locations: Bay City; Lansing-East Lansing; Saginaw-Saginaw Township North; and Battle Creek, respectively.

About 1.9 percent of new and existing homes sold during the second quarter were affordable to those earning the area’s median family income of $56,200 in the Los Angeles-area housing market. The median sales price of all homes sold in the area during the period was $521,000.

Among metro areas smaller than 500,000 people, every entry at the bottom of the affordability chart was located in California, the association announced.

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