Housing affordability improves
The National Association of Home Builders, which released its NAHB/Wells Fargo "housing opportunity" index this week, calculated that 57 percent of the new and existing homes sold in the first three months of this year in the Baltimore metro area were in price ranges affordable to families making the area's median income. Less than half the homes sold in the last three months of 2007 fit the same criteria.
The low point in the 17-year index was the spring of 2006, when the median-income family could afford just 41 percent of the homes that sold in the Baltimore metro area. (The index defines a home as affordable if the typical household wouldn't have to spend more than 28 percent of its income on the mortgage payments.)
The home builders take into account fluctuating interest rates as well as changing prices and incomes. In the first quarter of this year, according to the figures they track, interest rates fell, incomes rose and prices dropped.
The Baltimore area ranks 123rd out of 223 metros for affordability, with 1 being most affordable. It was 31st in the spring of 2000, when three-quarters of the homes that sold were in the typical family's price range.
Nowadays, the area's median family income is $78,000 and the median home price is $250,000, the home builders say.