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Rise in Repo Homes Brings Uncertainty to the Housing Market

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By : John Cutts    99 or more times read
Over 60 percent of all properties, including repo homes, that were sold in the United States during the last quarter of the previous year were affordable. This means that a family earning $61,500 annually would allot equal or less than 28 percent of their income for housing payments.

The National Association of Home Builders/Wells Fargo Housing Opportunity Index showed that the 62.4 percent affordable houses, including repo homes, sold in the last quarter represented a marked increase from the 56.1 percent figures in the third quarter of 2008 and 46.6 percent from the last quarter of 2007.

The report stated that Indianapolis, Indiana topped the study for the U.S. cities, with the most low-priced housing market. Ninety three percent of all houses sold in the city were affordable to family households with median income. This is the 14th consecutive quarter that Indianapolis has topped the survey.

Meanwhile, the report also showed that the city of New York has the least affordable homes, with only 13.9 percent being affordable to family households with median income.

National Association of Home Builders Chairman Joe Robson explained that housing affordability gains during the last quarter of 2008 may have been a result of the increase in the number of foreclosure homes, declining home prices and favorable mortgage rates.

The U.S. median home price declined to 190,000 in the last quarter of 2008, from $205,700 of the same quarter in 2007, according to data provided by the National Association of Realtors.

However, the association of realtors noted that declining home prices, increase in the number of foreclosure homes and favorable mortgage rates failed to revive the catatonic housing markets.

Data provided by the association showed that the total 2008 sales of existing homes was 4.74 million, a decline from over 7 million sold during the housing market boom.

Meanwhile, new home sales took a dive to a yearly rate of about 331,000 due to the flood of foreclosure homes in the market. New home sales in 2008 were so far the lowest data reported since record keeping started in 1963.

Foreclosure, which has been the bane of the housing market, also changed the home price trend to affordability in the cities of Warren, Michigan, Youngstown, Ohio and Detroit.

On the other hand, aside from New York City, other cities with least affordable houses are San Francisco and Los Angeles, both in California.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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