Jacksonville area still the most affordable

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  • | 12:00 p.m. April 12, 2002
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For the third consecutive quarter, Jacksonville remains as Florida’s most affordable large housing market for the last three months of 2001, according to the National Association of Home Builders’ Housing Opportunity Index (HOI).

“Home buyers earning the median income of $54,500 could afford to purchase 78.4 percent of all the newly-built homes sold in the Jacksonville MSA in last year’s final quarter,” said Stephen Edmonds, president of the 1,600-member Northeast Florida Builders Association “Low interest rates on home mortgages helped keep homeownership within reach of hundreds of thousands of Americans according to the report just released.”

Also attributing local affordability to the Association’s goal to fight unnecessary fees, unfair taxes and regulations and a favorable sales environment primarily due to the low interest rates, Edmonds noted that the national weighted interest rate on adjustable- and fixed-rate mortgages, which is used to calculate the HOI, fell for a fifth straight quarter.

The 6.71 percent at year’s end is the lowest the measure has ever been in the history of the HOI.

“Housing’s strong production and sales, along with its 14 percent contribution to the nation’s Gross Domestic Product, has helped pull the country out of a recession,” said Edmonds. “Keep in mind that for every home sold here in Northeast Florida, thousands of dollars in home-related purchases are pumped back into our economy.”

According to the HOI, the average home price in Northeast Florida is $127,000. Jacksonville ranks in the top 50 nationally in affordability at No. 49 and in the top 25 in the south at No. 21. The Jacksonville MSA is comprised of Duval, Nassau, St. Johns and Clay Counties.

The far-reaching effects of a strong affordable housing market can be felt in all aspects of the economy.

“Building 100 single-family homes generates 250 jobs in our local economy and $1.4 million in new local taxes and fees in the first year of construction,” said Edmonds.

Jacksonville is again trailed by Orlando (75.4), Tampa/St/Pete (74.9), Fort Lauderdale (70.1) and Miami (55.7) as the state’s largest metropolitan markets, cities with populations of more than one million, ranked by housing affordability.

The state’s smaller markets reported a top five of Tallahassee (85.7), Melbourne Titusville-Palm Bay (84.9), Lakeland-Winter Haven (84.3), Pensacola (84.3) and Ocala (82.5)

The HOI is a measure of the percentage of homes sold that a family earning the median income can afford to buy.

“Nationally, families earning the median U.S. income of $52,500 could afford to purchase 64.1 percent of all the homes sold nationwide in last year’s fourth quarter,” said Edmonds. “Understanding that every one percent decline in mortgage rates means another 400,000 families can qualify to purchase a home, you can see why housing affordability remained so strong in the latest report.”

The national median home sales price in the final three months of 2001 was $158,000, down from $161,000 in the third quarter.

The nation’s most affordable housing market was Rockford, Ill., the second consecutive quarter the city has topped the index. Nationally, among cities with populations of more than one million, Indianapolis ranked at the top of the affordability chart for the second straight quarter.

With a median home sale price of $129,000, 87 percent of homes sold in Indianapolis during the fourth quarter were affordable to families making the area’s median income of $60,700.

The Housing Opportunity Index is based on the median family income, interest rates, and the price distributions of homes sold in 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.