Jacksonville Leads State Majors in Housing Affordability

May 26, 2005 -- The local housing market continues to be the backbone of the economy as the Jacksonville MSA is Florida's most affordable housing market among the state's major metropolitan areas according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI) for the first quarter of 2005.

In the Jacksonville market, comprised of Duval, Nassau, Clay and St. Johns Counties, fully 67.3 percent of homes sold in the first quarter were affordable to families earning that median household income of $57,500. The median price of all homes sold in the area during that time was $165,000. Jacksonville ranked 64th nationally and 18th in the South.

"Today's numbers show that our fight to keep housing affordable in Northeast Florida continues to allow more people to realize homeownership. That is why unfair regulations, taxes and impact fees do nothing more than lock people out of the American Dream of homeownership, while at the same time hurting the local economy by punishing the construction industry. An industry that generates thousands of jobs, wages, taxes and fees that benefit the entire economy," said Bryan Lendry, president of Brylen Homes and the Northeast Florida Builders Association.

Jacksonville is followed by Tampa-St. Petersburg (61.8), Orlando (54.8), Fort Lauderdale (46.2), West Palm Beach (43.2) and Miami-Miami Beach (26.3) in the state's affordability ranking of major markets. The NAHB/Wells Fargo HOI is a measure of the percentage of homes sold in a given area that are affordable to families earning that area's median income during a specific quarter. The index now incrorpoates newly revised HUD data for household income, which was previously underestimated in some markets, and revised property tax and insurance data in several metro markets.

"Clearly, favorable financing conditions helped keep housing affordability from declining more than it did in the beginning of this year, yet strong demand for homes drove up prices to beyond the reach of quite a few median-income earners," Lendry said. "Local governments should be looking at ways to improve housing affordability as much as possible, such as reducing impact fees and other regulatory barriers to homeownership."

The metropolitan statistical area comprising Youngstown, Warren and Boardman, Ohio (which includes some neighborhoods across the Pennsylvania border) was most affordable major metro nationwide and the third-most affordable out of all statistical areas that were ranked by the HOI. Also near the top of the affordability scale among major metros with populations over 500,000 were Grand Rapids-Wyoming, Mich.; Dayton, Ohio; and Buffalo-Niagara Falls, N.Y., in that order.

"On a national basis, housing affordability posted a moderate decline in the first quarter of this year versus the final quarter of 2004, due mostly to higher home prices and a slight uptick in home mortgage rates," said Roger Day, president of Orange Park-based Rosewood Homes. "Nationally the index shows that just over half of all new and existing homes sold in the first three months of this year were affordable to families earning the U.S. median family income of $58,000. This compares to the 52 percent of homes sold in 2004's fourth quarter that were affordable to families earning what was then the median income of $57,500."

Looking at smaller metros with populations under 500,000, Ocala led the state at 69.5 with a median income of $52,400 and sales price of $117,000 followed by Tallahassee at 69.1 with a median family income of $52,200 and sales price of $150,000. Lima, Ohio rated tops for housing affordability and was the most affordable statistical area ranked overall. There, 92.3 percent of homes sold in the first quarter of this year were affordable to families earning the median income of $51,800, and the median price of homes sold was $75,000. Cumberland, Md.-W.V. and Canton-Massillon, Ohio were the second- and third-most affordable smaller metros, respectively. The least affordable small metro area ranked by the HOI was Salinas, Calif., where only 4.3 percent of homes sold in the first quarter were affordable to median income earners making $60,300 annually. The median sales price of homes in Salinas during the period was $545,000.

The decline in nationwide affordability was mostly attributable to the fact that the median price of all homes sold in the first quarter of 2005 rose $6,000 from the end of 2004, bringing it back to where it was in the third quarter of last year, at $225,000. Also, the weighted average interest rate on homes sold inched up from 5.77 percent to 5.79 percent between the latest quarters. In the neighborhoods comprising the Youngstown-Warren-Boardman metro area, fully 90.2 percent of homes sold in the first quarter were affordable to families earning that locale's median household income of $51,300. The median price of all homes sold in the area during that time was $86,000.

At the other end of the affordability spectrum, Los Angeles-Long Beach-Glendale, Calif. was rated the least affordable major metropolitan area with a population greater than 500,000. There, just 5.2 percent of homes sold in the beginning of this year were affordable to families earning the median income of $54,500. The median price of homes that sold in and around Los Angeles in the period was $430,000. Prices of new and existing homes sold are collected from actual court records by First American Real Estate Solutions, a marketing company. Mortgage financing conditions incorporate interest rates on fixed- and adjustable-rate loans reported by the Federal Housing Finance Board.

Source: www.nahb.org