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Rockford, Illinois Most
Affordable Housing Market in the Nation
src NAHB.com
Rockford, Ill., was the nation’s most affordable
housing market in this year’s second quarter as higher
interest rates took a significant toll on nationwide housing
affordability, according to the National Association of Home
Builders’ Housing Opportunity Index (HOI), released today.
The HOI is a quarterly measure of the percentage of homes sold
that a family earning the median income can afford to buy. The
HOI for April through June of 2000 ranked 173 metro areas on the
basis of over 600,000 recorded home sales for a nationwide score
of 58.4, down 4.4 points from the first quarter and the lowest
score in nearly eight years.
"Families earning the median U.S. household income of
$50,200 could afford to purchase 58.4 percent of homes sold
nationwide during the second quarter of 2000," explained
NAHB President Robert Mitchell, a home builder from Rockville,
Md. "That compares to 62.8 percent of homes that were
affordable in the previous quarter and 69.6 percent of homes
that were affordable at the HOI’s peak in early 1999. This is
the first time the HOI has dipped below 60 since mid-1992."
Mitchell attributed the decline primarily to the higher mortgage
interest rates that prevailed in the second quarter. He pointed
out that the national weighted average interest rate on
adjustable and fixed rate mortgages, used to calculate the HOI,
rose more than 20 basis points between the first and second
quarters.
"The average mortgage interest rate on all home sales that
took place in this year’s second quarter was 8.20 percent, up
from 7.93 percent in the first quarter and the highest average
since the second quarter of 1992. That gain made it more
difficult for some families to afford homeownership,"
Mitchell said. He added, however, that rates have drifted lower
in recent weeks, which should help prospective buyers. Mitchell
also noted that higher prices on new and existing homes were
factors in the second quarter.
The second quarter of 2000 marks the third time that Rockford.,
Ill., has garnered the top spot on the housing affordability
chart. The last time Rockford held the title was in the first
quarter of 1999. Families earning Rockford’s median income of
$55,300 could afford to purchase 89.3 percent of homes sold
there during the second quarter. The median price of homes sold
in Rockford was $90,000.
San Francisco, where the median sale price was $510,000 in the
second quarter, remained at the bottom of the affordability
chart. A mere 5.9 percent of homes were affordable to families
earning that area’s median income of $74,900 in the April -
June period.
The Midwest was the most consistently affordable region, with 14
of its surveyed markets being ranked on the "25 Most
Affordable Metro Areas" list in the second quarter. The
South had eight entries in the top 25, while the Northeast had
three and the West had zero.
Conversely, western markets comprised 19 of the entries on the
"25 Least Affordable Metro Areas" list, while the
Northeast had six markets on that list and the Midwest and South
had no entries on it.
The most affordable metro areas by region in the second quarter
were:
Allentown-Bethlehem-Easton, Pa. and Syracuse, N.Y., tied for
first in the Northeast; Rockford in the Midwest;
Wilmington-Newark, Del.-Md. in the South; and Anchorage, Alaska
in the West. The least affordable metro areas by region were:
Portsmouth-Rochester, N.H.-Maine in the Northeast; Ann Arbor,
Mich. in the Midwest; Miami, Fla. in the South; and San
Francisco in the West.
Editor’s Note: The Housing Opportunity Index is based on the
median family income, interest rates, and the price
distributions of homes sold for each market in a particular
quarter of a year. The price of homes sold is collected from
actual court records by First American Real Estate Solutions, a
marketing company. The median family income for each market is
calculated by the Department of Housing and Urban Development
(HUD).
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Rockford consistently ranks in
the top five among metropolitan areas in the U.S. for most affordable
housing by the National Association of Home Builders. The average
family home costs much less than its equivalent in neighboring
communities.
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Median
Purchase Price (1998-2002)
Existing Single Family Home |
| |
Rockford |
Belvedere |
Freeport -Galena |
Illinois |
U.S. |
| 1998 |
$93,000 |
$104,900 |
$72,400 |
$135,100 |
$128,400 |
| 1999 |
$93,800 |
$103,200 |
$78,000 |
$137,900 |
$133,300 |
| 2000 |
$95,300 |
$111,000 |
$77,500 |
$140,800 |
$139,000 |
| 2001 |
$100,400 |
NA |
$87,200 |
$150,800 |
$147,800 |
| 2002 |
$105,700 |
$128,600 |
$89,400 |
$161,700 |
$158,300 |
| Existing
Single Family Home Sales |
| |
Rockford |
Belvedere |
Freeport -Galena |
Illinois |
U.S. |
| 1998 |
4,315 |
493 |
558 |
105,339 |
4,970,000 |
| 1999 |
4,932 |
436 |
558 |
108,350 |
5,205,000 |
| 2000 |
5,202 |
431 |
688 |
105,595 |
5,113,000 |
| 2001 |
5,136 |
NA |
897 |
107,311 |
5,296,000 |
| 2002 |
5,814 |
354 |
1,024 |
113,613 |
5,563,000 |
| Housing
Opportunity Index - Fourth Quarter 2001 |
| 5 Most Affordable
Metro Areas |
Rank |
| Rockford,
IL MSA |
1 |
| Davenport-Moline-Rock
Island, IA-IL MSA |
2 |
| Springfield, IL MSA |
3 |
| Champaign-Urbana, IL
MSA |
4 |
| Peoria-Pekin, IL MSA |
5 |
Median
Sale Price Comparison
Existing Single Family Home (2002) |
| Municipality |
Sale
Price |
| Elgin |
$182,100 |
| Madison,
WI |
$177,000 |
| Chicago |
$174,500 |
| Milwaukee,
WI. |
$173,800 |
| Will-Grundy Co. |
$173,400 |
| Bloomington-Normal |
$132,700 |
| Champaign |
$110,400 |
| Rockford |
$105,700 |
| Freeport-Galena |
$89,400 |
| Peoria |
$89,300 |
| Quincy |
$69,800 |
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