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New York becomes least affordable housing market in U.S.

Posted by kim carpenter on August 21, 2008
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By David Goldman, CNNMoney.com staff writer

Home prices continue to tumble across the country, making homes more affordable in most U.S. cities, according to a new report released Tuesday.

Nationally, 55% of homes sold from April through June were affordable to families earning the U.S. median income of $61,500, according to a quarterly report released Tuesday by the National Association of Home Builders (NAHB).

That’s up from 53.8% in the first quarter of 2008, and the most affordable home prices have been since the second quarter of 2004.”Homes became more affordable because median income and interest rates remained about the same throughout the country, as home prices continued to fall,” said Gopal Ahluwalia, an NAHB economist.

Median home prices dropped to $215,000 in the quarter, which are about 10% below year-ago levels of $240,000, according to NAHB.

“This is definitely positive news, because more people can afford to buy a home,” said Ahluwalia. “Still, actual sales haven’t picked up, because people are waiting on the sidelines as they fear home prices will continue to decline.”

Falling home sales have battered the homebuilding industry. The NAHB study followed a Census Bureau report also released Tuesday that showed home building fell sharply in July to a 17-year low. Monday, a monthly NAHB report showed homebuilders’ confidence in the housing market remained at record low levels.

Tale of two cities: Indianapolis and New York

Indianapolis led the the nation’s major metro areas in home affordability for the 12th straight quarter. The median price of homes sold during the second quarter was $108,000, down from $122,000 last year. And 91.6% of the households there earning the median income of $65,100 could afford to buy a median priced home. That’s up from 86.8% last year.

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