Home Affordability Rankings For All 225 Metro Areas, Including Ohio (Q2 2010)

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With home prices in gentle recovery and mortgage rates continuing to fall, home affordability is cresting in Ohio, and nationwide.

Mortgage Rates Drive Down Homeownership Costs

According to the Home Opportunity Index, more than 72 percent of homes sold between April-June 2010 were affordable to families earning the national median income.  The data is tracked by the National Association of Home Builders.

It's the second highest reading in the survey's history.

The data shouldn't come as a surprise because of how home affordability is calculated -- it's based on the combination of home prices and mortgage rates.  Home prices, as we know, were battered in the latter part of last decade and are only now making a modest recovery.

Mortgage rates, on the other hand, have been steadily dropping.  In the same April-June 2010 time period, conforming 30-year fixed mortgage rates fell by 1/2 percent.

A half-percent drop in mortgage rates saves homeowners $1,085 annually, assuming a $250,000 mortgage.

Where Homes Are "Most Affordable"

Like everything real estate-related, though, home affordability varies by locale.

For example, 97.2% of homes sold in Syracuse were affordable for families making the area's median income which earning the New York city its first "Most Affordable Major City" designation.  Indianapolis was the first quarter winner.

Here in Ohio, homes were especially affordable, too:

• Dayton : 92.8% of homes are "affordable"; 28th nationally
• Cincinnati : 88.4% of homes are "affordable"; 46th nationally
• Columbus : 88.1% of homes are "affordable"; 47th nationally

On the opposite end of the spectrum, the "Least Affordable Major City" title went to the New York-White Plains, NY-Wayne, NJ area for the 9th consecutive quarter.  Just 19.9% of homes are affordable to families earning the local median income.

Chicago ranked 175th.

The rankings for all 225 metro areas are viewable on the NAHB website.

When It's Time To Buy, You'll Need A Pre-Approval Letter

All things considered, buying a home may never be this inexpensive again. If you were planning to purchase later this year, or sometime in 2011, you may want to consider move up your time frame.  And you're going to need a pre-approval letter.

To get a mortgage application in-process or to see for how much you'd qualify,. I answer all my owns emails and am happy to get you started.

(This post adapted from Bring the Blog, a blog-publishing service for loan officers and real estate agents.)