After reaching a record high of 77.5 percent in the first quarter of this year, housing affordability declined to 73.8 percent in the second quarter of this year, according to the ""Housing Opportunity Index (HOI)"":http://www.nahb.org/news_details.aspx?sectionID=135&newsID=15477 released Monday by the ""National Association of Home Builders (NAHB)"":http://www.nahb.org/default.aspx and ""Wells Fargo."":https://www.wellsfargo.com/[IMAGE]
Despite the decline, ""interest rates and overall housing affordability remain very favorable on a historic basis,"" said Barry Rutenberg, chairman of NAHB and a homebuilder in Gainesville, Florida.
The rate has remained elevated above 70 percent since the start of 2009.
The HOI measures the percentage of homes sold in a particular quarter that are affordable to those earning at the median income level.[COLUMN_BREAK]
In the second quarter, 73.8 percent of homes sold were affordable to those earning the national median income of $65,000.
The primary contributing factor to the decline in affordability in the second quarter was rising home prices across the nation. ""A full 92 percent of metros covered in the latest HOI saw their median home prices rise between the first and second quarter,"" according to a ""press release"":http://www.nahb.org/news_details.aspx?sectionID=135&newsID=15477 from NAHB.
Rutenberg suggests the decline in affordability over the past quarter ""is a positive development because it is another signal that the housing recovery is starting to take root.""
He says the drop ""lends needed confidence to prospective buyers and sellers who have been reluctant to move forward in the current marketplace.""
The New York-White Plains-Wayne, New York-New Jersey metro area has been the least affordable housing market for the past 17 quarters, including the most recent one. The metro has an affordability rate of 29.4 percent.
The most affordable major market in the most recent quarter, with an affordability rate of 93.4 percent is Youngstown-Warren-Boardman, Ohio-Pennsylvania.
Dayton, Ohio; Buffalo-Niagara Falls, New York; and Indianapolis-Carmel, Indiana also ranked at the top of the affordability index in the second quarter.
Among smaller markets, Fairbanks, Alaska posted the highest affordability rate ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô 98.7 percent.