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THIRD QUARTER HOUSING OPPORTUNITY JUMPS 13 PERCENT FROM LAST YEAR

THIRD QUARTER HOUSING OPPORTUNITY JUMPS 13 PERCENT FROM LAST YEAR
 /ADVANCE/ WASHINGTON, Jan. 8 /PRNewswire/ -- With mortgage interest rates falling to their lowest level in nearly 20 years, the buying power of a typical American family purchasing a new or existing home increased 13 percent during the past year, according to the third quarter Housing Opportunity Index compiled by the National Association of Home Builders (NAHB).
 "Households earning the national median income were able to afford to buy 33.9 percent of the homes offered for sale nationwide, up from 30 percent for the same period last year," said NAHB President Mark Ellis Tipton. "The huge jump in affordability was due primarily to the combination of falling interest rates and extremely competitive home prices."
 Regionally, trends varied little from the second quarter, as the most affordable housing markets were centered in the Midwest and South while the least affordable markets were in the West (California) and Northeast.
 Of the 191 metropolitan areas surveyed, Jackson, Mich., with a rating of 88.7 percent, was the most affordable area while San Francisco, measuring 10.6 percent on the Housing Opportunity Index, remained the nation's most expensive city. The numbers represent the percentage of both new and existing homes sold during the quarter that could have been purchased at prevailing interest rates by a household earning the area's median income.
 With housing costs and incomes varying widely from market to market, NAHB's Housing Opportunity Index measures the ability of a typical family to purchase a home in its own market.
 For example, in Jackson, the median income was $36,800 and the median home price was $60,000. According to the mortgage underwriting standards used for calculating the index, at the prevailing interest rate of 9.25 percent, a household could afford to purchase a home costing 2.8 times its annual income, or in this case, $103,040. In Jackson, 88.7 percent of the homes sold during the third quarter were priced at or below $103,040, making it the most affordable area in the country.
 Conversely, in San Francisco, where the median income was $49,900 and the median home price was $275,000, the typical family could afford a home costing $139,720. Only 10.6 percent of the homes sold in San Francisco during the third quarter were priced at or below $139,720, making San Francisco the least affordable housing market in the country.
 The third quarter tabulations analyzed 459,476 sales of new and existing homes in 191 markets. Nationally, the median income was $29,900 and the median price of a home was $110,000. The index showed that housing tends to be most affordable in smaller markets throughout the Midwest and South and least affordable in the larger, highly urbanized markets in the Northeast and West, where the cost of land, land development and construction have outstripped income increases in recent years.
 Of the top 25 most affordable markets, 21 were located in the Midwest, two in the Northeast and two in the South.
 Seventeen of the 25 least affordable housing markets were clustered in the West, along with seven from the Northeast and one from the South.
 Regionally, the most affordable housing markets were Jackson in the Midwest; Amarillo, Texas, in the South; Nashua, N.H., in the Northeast; and Greeley, Colo., in the West.
 The least affordable markets in each region include San Francisco in the West; New York in the Northeast; Little Rock-North Little Rock, Ark., in the South; and Aurora-Elgin, Ill., in the Midwest.
 25 MOST AFFORDABLE MARKETS
 (starting with most affordable)
 National Rank
 Jackson, Mich. 1
 Saginaw-Bay City-Midland, Mich. 2
 Peoria, Ill. 3
 Elkhart-Goshen, Ind. 4
 Kokomo, Ind. 4
 Battle Creek, Mich. 6
 Mansfield, Ohio 7
 Amarillo, Texas 8
 Kansas City, Mo.-Kan. 9
 Rockford, Ill. 10
 Lincoln, Neb. 11
 Lima, Ohio 12
 Champaign-Urbana-Rantoul, Ill. 13
 Davenport-Rock Island-Moline, Iowa-Ill. 14
 Des Moines, Iowa 15
 Lansing-East Lansing, Mich. 16
 Omaha, Neb.-Iowa 16
 Youngstown-Warren, Ohio 18
 Milwaukee 19
 Grand Rapids, Mich. 20
 Nashua, N.H. 21
 Springfield, Ill. 22
 Brazoria, Texas 23
 Detroit 24
 Manchester, N.H. 25
 25 LEAST AFFORDABLE MARKETS
 (starting with least affordable)
 San Francisco 191
 Salinas-Seaside-Monterey, Calif. 190
 Los Angeles-Long Beach, Calif. 188
 Oxnard-Ventura, Calif. 188
 New York 186
 Santa Cruz, Calif. 186
 Santa Rosa-Petaluma, Calif. 185
 Vallejo-Fairfield-Napa, Calif. 184
 Santa Barbara-Santa Maria-Lompoe, Calif. 183
 San Diego 182
 Anaheim-Santa Ana, Calif. 181
 Stockton, Calif. 180
 Merced, Calif. 179
 San Jose, Calif. 178
 Modesto, Calif. 177
 Oakland 176
 Stamford, Conn. 175
 Riverside-San Bernardino, Calif. 174
 Sacramento, Calif. 173
 Jersey City, N.J. 172
 Little Rock-North Little Rock, Ark. 171
 Bergen-Passaic, N.J. 170
 Newark, N.J. 169
 Fall River, Mass.-R.I. 168
 New Haven-Meriden, Conn. 167
 Source: Dataman. Analyzed by Economic and Housing Policy Department of NAHB.
 NOTE: The Housing Opportunity Index shows the percentage of both new and existing homes sold during the quarter that could have been purchased by a household earning the median income in a particular metropolitan area at the prevailing mortgage interest rate.
 According to the mortgage underwriting standards used for calculating this index, a household could afford to purchase a home equal to 2.8 times its annual income at the prevailing mortgage interest rate, which was 9.25 percent during the third quarter.
 The data in this release was analyzed by the NAHB Economics and Housing Policy Department and comes from two different sources. The home price data was collected from official court records by Dataman, an Atlanta-based marketing company. The median household income for each metro area was calculated by the U.S. Department of Housing and Urban Development.
 -0- 1/8/92/1830
 /CONTACT: Jay Shackford of NAHB, 202-822-0406/ CO: National Association of Homebuilders ST: District of Columbia IN: SU:


MK -- DC014 -- 7864 01/08/92 14:03 EST
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Date:Jan 8, 1992
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