Report Shows Modesto, Merced & Stockton As "Most Affordable" In CA

BACKGROUND:
In a recent report issued by the National Association of Home Builders (NAHB) and Wells Fargo, the NAHB/Wells Fargo Housing Opportunity Index (HOI) report tracks home affordability by comparing the median home sales price to the median income for each metropolitan area, and issues a HOI rating that indicates the percentage of homes that are considered affordable to families earning the median income for that area. A rating of 50, for example, indicates that 50% of the homes are affordable to median-income-earning families. The higher the rating, the more affordable the area.

FINDINGS:
The HOI report for the 4th Quarter of 2008 shows that Modesto, Merced, and Stockton were the three most affordable areas in the state of California, with affordability rates of 71.1% for Modesto, 70.9% for Merced, and 66.4% for Stockton. Sacramento/Roseville was next in line, then Yuba City, then Vallejo/Fairfield.

 

As noted in an earlier post, the 71.1% affordability rate for the Modesto area makes it more affordable than at any time in Modesto's past, since 1998.

The least affordable? No great surprise there: San Francisco/San Mateo/Redwood City. It's very interesting that the least and most affordable areas are within commuting distance of each other!