Pittsburgh ranks 40th out of 159 most affordable cities
The Pittsburgh housing market was a little less affordable in 2005 than it was in 2004, according to a national survey.
But 40th out of 159 still isn't all that bad.
That was the finding of the year-end National Association of Home Builders/Wells Fargo Housing Opportunity Index.
It ranked the seven-county Pittsburgh region as the 40th most affordable in the country, based on a median home price of $120,000 and a median annual household income of $54,900. Median means half the home prices or households are above the mean and half are below.
The Pittsburgh region ranked 32nd on the survey in 2004, based on a median home price of $106,000, and a median income of $78,900.
The survey found Indianapolis, Ind., to be the nation's most affordable major housing market at year-end 2005.
But overall nationwide housing affordability slipped to the lowest level in the history of the survey because of higher interest rates and rising home prices.
"The latest HOI shows that only 41 percent of new and existing homes that were sold during the final quarter of 2005 were affordable to families earning the national median income," said David Pressly, president of the national builders' trade group and a home builder from Statesville, N.C. "This is down from 43.2 percent of homes sold in the third quarter and 52 percent of homes sold in the final quarter of 2004."
In Indianapolis, 88.7 percent of new and existing homes that were sold in the fourth quarter were affordable to households earning the area's median income of $64,000, the survey showed. The median sales price of all Indianapolis homes sold in that time frame was $120,000.
In comparison, 69.7 percent of homes sold in Pittsburgh were affordable based on that same criteria, down from 78.9 percent at the end of the year in 2004.
Among affordable major metro markets, areas with over 500,000 in population, were Youngstown-Warren-Boardman, Ohio-Pa., followed by Detroit-Litonia-Dearborn, Mich.; Grand Rapids-Wyoming, Mich.; and Dayton, Ohio, in that order.
At the bottom of the affordability scale was Los Angeles-Long Beach-Glendale, Calif., where just 2.3 percent of homes sold in the fourth quarter were affordable to families earning the area's median household income of $54,500.
The median price of all homes sold in that area was an even $500,000.
And as usual, the bottom of the affordability scale was dominated by large California cities, including Santa Ana-Anaheim-Irvine, San Diego-Carlsbad-San Marcos, and Stockton. New York-White Plains-Wayne, N.Y.-N.J. rounded out the list of the five least-affordable major housing markets.
Pressly noted that the housing affordability situation should improve as mortgage rates peak later this year and home price appreciation decelerates from the record rates of the last several years to a more normal pace.
In the Pittsburgh area, appreciation should ease, but there will not be a downturn in prices, predicted Stuart Hoffman, chief economist for PNC Financial Services Group, at program sponsored by the Grubb & Ellis Co., a commercial real estate firm.
Hoffman sees price gains in the 3 percent to 4 percent range, down from about 4 percent or 5 percent over the last several years.
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