Low mortgage interest rates makes US a buyer's market
Property in the US is close to a record high in terms of affordability due to low mortgage interest rates and stable prices, it is claimed.
The latest survey from the National Association of Home Builders and Wells Fargo shows that 72.3% of all new and existing homes sold in the second quarter of 2010 were affordable to families earning the national median income of $64,400.
Until 2009 their Housing Affordability Index rarely topped 67% and never reached 70%. The NAHB judges a home to be affordable if a family making the metro area’s median income could devote no more than 28% of their take home pay toward housing costs.
‘Homeownership is within reach of more households than it has been for almost a generation,’ said NAHB chairman Bob Jones, a home builder from Bloomfield Hills, Michigan.
‘Interest rates continue to hover at historic low levels, the economy is beginning to rebound and with house prices starting to stabilize, conditions are beginning to draw home buyers back into the market, which is a positive step on the path to recovery,’ he explained.
Syracuse, New York, was the most affordable major housing market in the country, edging out Indianapolis-Carmel, which had held the top ranking for nearly five years. In Syracuse, 97.2% of all homes sold were affordable to households.
Also near the top of the list of the most affordable major metro housing markets were Detroit-Livonia-Dearborn, Michigan, Youngstown-Warren-Boardman, in Ohio, and Buffalo-Niagara Falls, in New York state.
Among smaller housing markets, the most affordable was Springfield, Ohio, where 96.6% of properties sold during the second quarter of 2010 were judged affordable. Other smaller housing markets near the top of the index included Mansfield, Ohio, Bay City, Michigan, Monroe, Michigan, and Lansing-East Lansing, also in Michigan.
New York-White Plains-Wayne, were the least affordable major housing markets during the second quarter of 2010 where only 19.9% of all homes sold during the quarter were affordable. This was the ninth consecutive quarter that the New York metropolitan division has occupied this position.
The other major metro areas near the bottom of the affordability scale included San Francisco-San Mateo-Redwood City; Santa Ana-Anaheim-Irvine, California; Los Angeles-Long Beach-Glendale, California and Honolulu, all metro areas that have lingered among the bottom rankings for several quarters.
San Luis Obispo-Paso Robles, California, was the least affordable of the smaller metro housing markets in the country during the second quarter. Others near the bottom included Santa Cruz-Watsonville, California, Ocean City, New Jersey, Santa Barbara-Santa Maria-Goleta, California and Napa, California.
Meanwhile separate research suggests that New York’s real estate market is booming as those with money to spend cash in on low prices. Real estate agencies are reporting a surge in activity.
A report by the Real Estate Board of New York (REBNY) showed a 72% jump in the total value of house sales to $7.6 billion in the second quarter of 2010 compared to the same period the previous year. Apartment sales volume in Manhattan increased by 82% over the same period, it said.
The accelerated activity in New York, where the average price per square foot stands at $1,061 dollars, was due mostly to the high earnings in the city’s financial sector in past months, statistics show.