A national survey released today showed that Oahu improved from the fourth least-affordable U.S. housing market in last year's third quarter to the 10th in the final three months of 1995.
The National Association of Home Builders report said that 39.2 percent of Honolulu homes sold in the fourth quarter were affordable to a buyer making Oahu's median income.
By contrast, only 31 percent of the homes sold in the previous quarter were considered affordable. An even lesser proportion - 28.9 percent - were affordable in the second quarter, when Honolulu ranked as the sixth least-affordable market.
The improving affordability picture likely was due to several factors, including lower interest rates and a rise in personal income for Honolulu residents, according to Pam Jones, chief financial officer for Schuler Homes Inc.
Jones also cited increased buyer incentives offered by builders and creative mortgage packages offered by lenders.
"All these things combined would contribute to homes being more affordable," she said.
Jones said she would expect the trend to hold steady for the first quarter of this year because interest rates fell even more, to about 7 percent, before creeping up.
Hawaii's improving picture mirrored what happened nationally.
The association said 63.4 percent of homes sold throughout the country in the fourth quarter were deemed affordable, up from 61.3 in the previous period and suggesting greater purchase opportunities.
The Home Builders Housing Opportunity Index takes into consideration differences in property taxes and insurance rates. It was based on a survey of 525,000 sales of new and existing homes in 192 metropolitan areas.
The association found that the Midwest had 13 of the nation's 25 least-expensive markets in the final three months of 1995. The Northeast and South each had six. The West had none.
Lima, Ohio, regained the top spot on the index that it last held in the fourth quarter of 1994.
Lima, in northwest Ohio, had an 86.2 on the index. That meant that a family earning the median income of $38,600 could have purchased 86.2 percent of the homes sold during the quarter. The median price was $67,000. San Francisco, the least affordable, had a 21.4 ranking, meaning a family earning the median income of $58,800 could afford to buy just 21.4 percent of the homes sold. The median price was $276,000.
The following list shows the 10 least-affordable U.S. housing markets, according to the National Association of Home Builders. The number corresponding to each area is the percentage of the homes sold that were within reach of the median income household at the prevailing mortgage rate. Dubious distinction
Associated Press
- San Francisco 21.4
- Santa Cruz, Calif. 27.8
- Laredo, Texas 29.7
- New York 34.6
- Santa Rosa, Calif. 35.7
- Portland, Ore. 36.5
- Salinas, Calif. 36.6
- El Paso, Texas 36.8
- Provo, Utah 37.5
- Honolulu 39.2