Indianapolis foreclosed homes for sale have been declining in recent months, but they are still bearing upon significantly on homeownership and home affordability.
According to the Housing Opportunity Index of the National Association of Homebuilders and Wells Fargo, Indianapolis was on top of the chart on affordable housing in the quarter ended September. The NAHB/Wells Fargo Index showed that nearly 95 percent of houses in Indianapolis are affordable to all families earning the median household income in the area, which is $68,100.
The NAHB study also showed that Indianapolis has been occupying the highest level of the affordability index in the U.S. for the past 17 quarters due partly to the relatively higher income levels in Indianapolis.
Other factors that have been helping improve house affordability in Indianapolis and in other cities across the U.S. are record-low mortgage rates, low-priced foreclosures and low home prices.
Across the U.S., home affordability hovered near the highest level for the third quarter in a row since 1991 when the NAHB/Wells Fargo housing index was launched. The index showed that more than 70 percent of all newly-built and previously-owned houses sold during the quarter ended September were affordable to individuals and families earning $64,000, which was the nationwide median household income.
The third-quarter affordability level marked an increase from 56 percent in the quarter ended September in 2008, but marked a drop from 72.3 percent in the quarter ended June.
Not only did foreclosed homes for sale in Indianapolis affected home affordability levels; they also affected homeownership trends in the metro area. According to housing analysts and multi-housing executives like Steve LaMotte of CB Richard Ellis, foreclosures made the younger generation less eager to borrow money to purchase a home.
Together with the rising unemployment rate, which hit the 26-year record of 10.2 percent nationwide, the possibilities of default and foreclosure have prevented fresh college graduates and newly employed professionals from obtaining mortgage loans to buy their first homes.
In Indianapolis, homeownership reached its highest point in 2006 at around 76 percent and then slowly started to fall until reaching the level of nearly 72 percent in October.
Nevertheless, Indiana brokers are optimistic that the homeownership rate will rise again because of the high home affordability level in Indianapolis. Besides, analysts cite the fact the Indiana has historically posted higher homeownership rates since the 1960s.
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