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NAHB: Home Affordability Increases in Q3

Home affordability continued to rise in the third quarter even as home prices inched up, according to the ""National Association of Home Builders"":http://www.nahb.org/default.aspx (NAHB).

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The association's Home Opportunity Index (HOI) revealed 74.1 percent of all homes sold in Q3 were affordable to families earning the U.S. median income of $65,000. That percentage was up slightly from 73.8 percent in the second quarter.

Barry Rutenberg, NAHB chairman and a homebuilder from Gainesville, Florida, said the data is ""good news on two fronts, because it shows that the share of homes affordable to median-income earners has risen even as home prices have continued to gradually recover from their recession lows.""

The median price of all new and existing homes sold in the third quarter was $189,000, according to NAHB chief economist David Crowe. The Q3 figure was up from [COLUMN_BREAK]

$176,000 in the same period last year ""and the strongest number we've seen since the final three months of 2008,"" Crowe said.

At the same time, though, mortgage rates were at their lowest levels in decades, offsetting increased prices and driving affordability up.
However, low rates may be a cold comfort for potential buyers who can't qualify in today's tight credit marketplace, Crowe noted.

Out of all the major markets, Ogden-Clearfield, Utah, claimed the top spot for affordability for the first time in the history of the index. According to the report, 93.2 percent of all new and existing homes sold in the third quarter were affordable to families earning the area's median household income of $71,500.

Fairbanks, Alaska, retained its spot at the top of the affordability chart in smaller markets. An astounding 99.4 percent of homes sold there between July and September were affordable for families earning the area's median income of $92,900.

Meanwhile, the New York-White Plains-Wayne area in New York and New Jersey kept its status as least affordable major housing market in the country, with just 28.5 percent of homes sold being affordable to families earning the median income of $68,300. The area has held the top spot for 18 consecutive quarters, according to NAHB.

Among smaller markets, Santa Cruz-Watsonville, California, was named least affordable, with 44.4 percent of homes sold there in Q3 attainable for families earning the median income of $87,000.

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