Mortgage rates may have hit another all-time low but despite real estate properties becoming more affordable, the contracting supply of homes for sale makes shopping for homes difficult. However, there are still some affordable areas where one can find available houses to buy.
The latest REALTORS® Affordability Distribution Curve and Score report revealed that in April, the nation's affordability score is at 0.85, which is up from last year's score of 0.79. This means that listed homes have become eight percent more affordable--but it this is not the whole story.
While the affordability score is higher, the total volume of home for sale nationwide has dropped to historic lows. The inventory of homes available for sale at 53 percent is lower than the long-term average listing per household. That equates to 8 listed homes for every 1,000 households; the long-term historical average is 17 listed homes.
To the homebuyers, that means it will be more difficult now to search for their dream home. In fact, only four metros of the 100 largest metropolitan areas in the U.S. have more listings per 1,000 households than the long-term average: Cape Coral-Fort Myers, Florida with 24; Deltona-Daytona Beach-Ormond Beach, Florida with 21, Miami-Fort Lauderdale-West Palm Beach, Florida with 19; North Port Sarasota-Bradenton, Florida with 18 listings/1,000 households.
However, these four metropolitan areas do not offer more affordability as compared to the other markets nationwide. For the week ending in May 2, 2020, the most affordable metros nationally where home inventory is available are mostly southern metros. All six metros have at least 10 active listings for every 1,000 households and their affordability scores are at least 0.80.
Metro | Listings per 1,000 households | Affordability Score - April 2020 | Median Listing Price - April 2020 |
Des Moines-West Des Moines, IA | 10.9 | 1.03 | $269,800 |
Baton Rouge, LA | 11.7 | 1.00 | $248,800 |
Atlanta-Sandy Springs-Roswell, GA | 16.6 | 0.89 | $325,050 |
Virginia Beach-Norfolk-Newport News, VA-NC | 10.7 | 0.89 | $316,050 |
Jacksonville, FL | 13.4 | 0.83 | $311,545 |
Lakeland-Winter Haven, FL | 11.1 | 0.87 | $235,050 |
Data from: REALTORS® Affordability Distribution Curve and Score report
Meanwhile, the most affordable metros where finding available homes to buy are most difficult include five areas situated in the Northeast and Midwest.
Metro | Listings per 1,000 households | Affordability Score - April 2020 | Median Listing Price - April 2020 |
Buffalo-Cheektowaga-Niagara falls, NY | 2.5 | 0.95 | $219,950 |
Columbus, OH | 3.1 | 0.90 | $309,550 |
Rochester, NY | 31 | 0.91 | $250,000 |
Springfield, MA | 3.3 | 0.82 | $314,000 |
Harrisburg-Carlisle, PA | 3.6 | 1.02 | $250,050 |
Data from: REALTORS® Affordability Distribution Curve and Score report
The most affordable states according to the affordability scores include Iowa with 1.14, Indiana with 1.09, West Virginia with 1.08, Ohio with 1.08, and Kansas with 1.08. Additionally, the most affordable areas include Youngstown-Warren et al, OH-PA (1.18), Akron, OH (1.15), Dayton, OH (1.15), Toledo, OH (1.13), and Scranton-Wilkes-Barre et al, PA (1.10).
The REALTORS® Affordability Distribution Curve and Score by NAR and realtor.com® measures the housing affordability for all active inventory on the market according to income levels. The Affordability Score ranges between 0 and two and which a score of one or higher suggests that a market where the available homes for sale are affordable in proportion to the household income distribution.
