Home affordability rose to its highest level in at least 20 years in the fourth quarter of 2010, according to an index released by the National Association of Home Builders and Wells Fargo today.

The Housing Opportunity Index found that 73.9 percent of new and existing homes sold in the fourth quarter were affordable to families earning the national median income of $64,400 — surpassing the previous high, 72.5 percent, recorded in the first quarter of 2009.

"Today’s report shows that housing affordability at the end of 2010 was at its highest level since we started computing the HOI," said Bob Nielsen, NAHB’s chairman, in a statement. "However, while this is good news for consumers, both homebuyers and builders continue to confront extremely tight credit conditions, and this remains a significant obstacle to many potential home sales."

Before 2009, the index had never hit 70 percent and rarely topped 65 percent, the association said. Last quarter was the eighth straight quarter the index was above 70 percent.

Three states dominated among the top 10 most affordable metropolitan areas overall: Indiana, Michigan and Ohio. Elkhart-Goshen, Ind., ranked highest, with 97 percent of its homes affordable to a family making the area’s median income. All but one (Indianapolis-Carmel, Ind.) among the top 10 had populations under 500,000.

10 most affordable metro areas

Metro Area HOI Q4 2010 (Share of homes affordable for median income) 2010 median family income Q4 2010 median sales price
Elkhart-Goshen, Ind. 97% $58,600 $104,000
Lansing-East Lansing, Mich. 96.7% $65,900 $86,000
Kokomo, Ind. 96.5% $61,400 $80,000
Mansfield, Ohio 96.3% $55,100 $75,000
Bay City, Mich. 96% $56,200 $80,000
Cumberland, Md.-W.Va. 95.3% $52,200 $88,000
Springfield, Ohio 94.3% $56,800 $75,000
Flint, Mich. 94.2% $56,500 $82,000
Sandusky, Ohio 93.7% $64,000 $101,000
Indianapolis-Carmel, Ind. 93.5% $68,700 $106,000

Source: NAHB/Wells Fargo HOI

Among markets of 500,000 or above, the second and third most affordable markets in the fourth quarter were Youngstown-Warren-Boardman, Ohio-Pa., and Syracuse, N.Y., with indexes of 93.2 percent and 92.9 percent, respectively.

California markets dominated among the least affordable metro areas overall. They made up half of the country’s 10 least affordable metro areas with populations above 500,000, and six out of 10 of those with populations under 500,000. Among the top 10 least affordable overall, seven out of 10 had populations of 500,000 or more.

For the 11th straight quarter, New York-White Plains-Wayne, N.Y.-N.J., was the least affordable market in the country, with just slightly more than a fourth of homes affordable to families making the area’s median income.

10 least affordable metro areas

Metro Area HOI Q4 2010 (Share of homes affordable for median income) 2010 median family income Q4 2010 median sales price
San Diego-Carlsbad-San Marcos, Calif. 51.7% $75,500 $325,000
Bridgeport-Stamford-Norwalk, Conn. 46.5% $86,600 $372,000
San Luis Obispo-Paso Robles, Calif. 45.6% $72,500 $348,000
Santa Ana-Anaheim-Irvine, Calif. *** 45.5% $87,200 $415,000
Ocean City, N.J. 45.1% $68,100 $320,000
Santa Cruz-Watsonville, Calif. 45% $84,200 $405,000
Los Angeles-Long Beach-Glendale, Calif. *** 42.9% $63,000 $315,000
Honolulu, Hawaii 42.1% $81,700 $425,000
San Francisco-San Mateo-Redwood City, Calif. *** 31.5% $99,400 $584,000
New York-White Plains-Wayne, N.Y.-N.J. *** 25.5% $65,600 $426,000
***  Indicate metropolitan divisions. All others are metropolitan statistical areas.

Source: NAHB/Wells Fargo HOI

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