Housing affordability increased in the third quarter compared to the same quarter last year, the National Association of Home Builders reported today, though less than half of all new and existing homes sold during the third quarter were affordable to families earning the national median income.

Nine of the 10 least affordable metro areas tracked in the Housing Opportunity Index are in California, while four of the 10 most affordable metro areas are in Michigan and three are in Ohio.

About 57 percent of the 215 metro areas included in the index had index scores indicating that most homes sold in the third quarter were not affordable to a median-income family.

Nationwide, 42 percent of new and resale homes sold in the third quarter were affordable to families earning a median income of $59,000, compared with 40.4 percent in third-quarter 2006 and 43.1 percent in second-quarter 2007.

The national median price of homes sold in the third quarter was $239,000, down 3.6 percent compared with $248,000 in third-quarter 2006.

Among metro areas with a population of 500,000 or more, Indianapolis-Carmel, Ind., ranked as the most affordable, with 87.5 percent of homes sold affordable to a median-income family, followed by Detroit-Livonia-Dearborn, Mich.; Youngstown-Warren-Boardman, Ohio-Pa.; Scranton, Pa.; and Grand Rapids, Mich.

Los Angeles was the least affordable metro area in the nation among those with a population of 500,000 or more, with an estimated 3.7 percent of homes sold in the third quarter affordable for median-income families. Next on the list was Anaheim, Calif.; followed by San Francisco; New York City; and Nassau-Suffolk, N.Y.

Kokomo, Ind., with 90.5 percent of homes sold in the third quarter affordable to median-income families, was the most affordable metro area with a population below 500,000. Napa, Calif., was the least affordable metro area, with 3.3 percent of homes sold in the third quarter affordable to median-income families.

The national weighted interest rate on fixed- and adjustable-rate mortgages, which is a key component in the index, was 6.73 percent in the third quarter, down from 6.44 percent in the second quarter, the builders group reported.

Source: NAHB. *Figures based on 2006 population data.

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