Indianapolis Foreclosure Homes Boost Home Affordability
The substantial number of Indianapolis foreclosure homes has boosted home affordability in the city and helped put the city on top of a list of the ten most affordable cities to buy a house in the U.S.
According to the Wells Fargo Housing Opportunity and National Association of Homebuilders Index, the most affordable housing market is Indianapolis, with a 94.5 percent affordability score.
The city’s median home price is $107,000 and the median income is $68,100. With the median household income fairly high, a family earning the median income can buy a 4-bedroom 4-bath home in the city for $150,000.
The NAHB considers a house in a certain city affordable if a household earning the city’s median income can make their monthly home loan payments by spending not more than 28 percent of their monthly income.
Just like in other cities, foreclosures contributed to the decline of home prices in the city. In the first half of the year, based on a nationwide survey of 203 metro areas with the biggest foreclosure rates, Indianapolis ranked 46th with 1.48 percent of all its housing units getting default or foreclosure notices. Over 11,000 homeowners with home loans received delinquency or foreclosure notices.
Despite the increased affordability, however, the number of pending home sales in the 9-county Indianapolis area in July dropped by 3.1 percent compared to July last year, based on a report from a local based real estate research firm.
Pending home sales decreased to 2,267 contracts from 2,339 contracts in July 2008. Pending home sales in the first 7 months of this year also decreased, falling by 9.1 percent compared to the first 7 months last year.
The number of contracts to purchase decreased in 6 of the 9 counties, but Hamilton, Marion and Johnson counties experienced upticks.
Meanwhile, average home prices in July and in the first 7 months of 2009 declined compared to average prices last year. The average price in the first 7 months dropped to $136,943, compared to the average price of $155,240 in the first 7 months of 2008, marking a nearly 12-percent decrease.
Despite job cuts and layoffs in the auto industry, the city of Indianapolis has kept its unemployment rate from soaring to high levels by increased industry diversification. Banks, government agencies, insurers and pharmaceutical operations have all contributed to keep many residents employed.
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