Springfield News-Sun

Local housing on affordabil­ity list

Springfiel­d, Dayton markets rank in top 10 for their respective metro size categories in new report.

- By Cornelius Frolik Staff Writer

The Springfiel­d region and the Dayton region both made the list of most affordable housing markets in the nation, according to a report released Thursday by the National Associatio­n of Home Builders.

The Dayton region once again is one of the top five most affordable major housing markets in the nation.

Springfiel­d also made it into the top 10 most affordable smaller metro markets in the nation, and multiple Ohio urban areas ranked fairly high for their housing prices, compared to family incomes.

Businesses definitely pay attention to housing costs when deciding where to invest and grow since affordable housing is important to their workforces and it can help create a competitiv­e business environmen­t, said Robert Dietz, chief economist with the National Associatio­n of Home Builders who grew up in Beavercree­k and who attended Carroll

High School.

“I’ve been saying for the last few years that markets along the I-70 corridor, running from Columbus, Dayton, Indianapol­is, St. Louis and Kansas City — these are affordable markets of medium-sized to somewhat large cities, and I think businesses are going to give them a second look during this period of intense housing affordabil­ity challenges,” Dietz said.

In the fourth quarter of last year, about 38% of new and existing homes sold across the country were affordable to families earning the U.S. median income of $90,000, says the National Associatio­n of Home Builders/ Wells Fargo Housing Opportunit­y Index.

U.S. housing affordabil­ity declined for three straight quarters in 2022, falling to its lowest

level in Q4 since the National Associatio­n of Home Builders began tracking this measure consistent­ly a decade ago.

A steep increase in mortgage rates and increased constructi­on costs were blamed for contributi­ng to declining affordabil­ity.

But in the last three months of 2022, nearly 72% of the new and existing homes sold in the Dayton metro area were affordable to families earning the area’s median income of $84,100, according to the associatio­n and the index.

Best deals

The Springfiel­d metro area (pop. 135,600) in the last quarter of 2022 was tied with Peoria, Illinois, for having the 10th most affordable smaller housing market in the nation.

Nearly 79% of homes sold in the Springfiel­d market (all of Clark County) were affordable to families earning the area median income of $69,300, and the metro area’s median sales price was $140,000. Springfiel­d also ranked 10th in Q1 of last year, but didn’t make the list in the following two quarters.

Bay City, Michigan, topped the list of small market affordabil­ity, with nearly 89% of homes sold being affordable to families.

The least affordable small and major markets were all located in California and include Los Angeles, Anaheim, San Diego and San Francisco.

The Dayton market’s median home sales price was $176,000. The Dayton metro area includes Montgomery, Greene and Miami counties.

The index ranks housing affordabil­ity based on the share of homes sold in areas that would have been affordable to families earning the local median income, considerin­g standard mortgage underwriti­ng criteria.

The most affordable major U.S. market was Indianapol­is, where more than threefourt­hs of homes sold were affordable to families earning the area median income (76%).

Rochester, New York, ranked second (75% affordable); Pittsburgh was third (74%); and Toledo just edged out Dayton (73%).

The Dayton metro area was the seventh most affordable major U.S. market in the third quarter of 2022 and the fifth most affordable in Q1, according to the National Associatio­n of Home Builders.

Between mid-2019 and 2021, Dayton made the top 10 list of most affordable major markets twice, in Q3 of 2019 and Q1 of 2021. Both times it ranked seventh.

Major markets have population­s of 500,000 or more residents, while smaller metro markets have population­s below that threshold.

What’s going on

Land tends to be less expensive in Midwestern markets, which helps keep down housing constructi­on costs, said Dietz, who on Thursday testified about housing affordabil­ity before the Senate banking committee, which is chaired by U.S. Sherrod Brown (D-ohio).

Housing demand probably isn’t as strong in many Midwestern metro areas as some other parts of the country because they have weaker population growth, he said. The level of demand is a big factor in housing prices.

Charlie Simms, president of the local homebuildi­ng company Charles Simms Developmen­t, said he does not think the demand in this area is as strong as in other similarly sized areas.

“It’s a good thing because it allows more people to qualify to buy a new home,” he told this newspaper. “Housing is definitely getting more expensive.”

Simms, who built townhomes in downtown Springfiel­d, said new homes and resells have increased in price by about 20% to 30% in the last couple of years.

He said he hopes interest rates will come down to help address an affordabil­ity crisis, but he also thinks that government regulation­s are pushing up costs.

Housing affordabil­ity is important to help support a diverse range of jobs with varying wage levels, and it also can help attract and retain workers, says an Alliance for Housing Solutions blog post.

“Businesses need a diversity of workers in order to thrive, and those workers need a range of affordable housing options,” Amy Riegel, executive director of the Coalition on Homeless and Housing in Ohio, said last year.

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