Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, January 11, 1994 TAG: 9401110017
SECTION: BUSINESS PAGE: B-5 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
The National Association of Home Builders said Monday that Jackson, with a 94.8 score, recaptured the top spot on its Housing Affordability Index, a position it last held during the second quarter of 1992.
The index measures the ability of the typical family to buy a home in its own market by comparing median family income with median home price. The median means half of the homes cost more and half cost less, or that half of the incomes were more and half less.
The South followed the Midwest as the most affordable region. The Northeast and West, particularly California, were least affordable.
"The Midwest market is a strong area of the nation for affordability," said Home Builders President J. Roger Glunt. "But with mortgage interest rates still so low, homes are more affordable today in just about every area of the country."
San Francisco remained at the bottom of the index, a ranking it has held since the Home Builders began compiling the listings in the first quarter of 1991. It had a score of just 17.5.
But the Home Builders said even the most expensive areas like San Francisco continued to show improved affordability as interest rates moved downward from 7.27 percent in the second quarter to 7.04 percent in the third.
The third-quarter index was based on 600,000 sales of new and existing homes in 188 metropolitan areas.
The Home Builders said the median income in Jackson was $38,700 in the third quarter. According to the mortgage underwriting standards used for calculating the index, at the prevailing mortgage rate of 7.04 percent, a family could afford to buy a home costing 3.5 times its annual income, or $135,450. In the Jackson area, 94.8 percent of the homes were priced at or below $135,450.
At the same time, the median income in San Francisco was $54,300 and the median price $280,000, meaning the typical family could afford a home costing $190,050. Only 17.5 percent of the homes there were priced at or below $190,050.
Nationally, the median price in July-September rose to $110,000 from $109,000 during the prior three months, while the national household income remained unchanged at $39,700.
That meant the typical American family could afford to buy 65.1 percent of the homes offered for sale across the country, unchanged from April-June thanks to lower mortgage rates.
by CNB