The metropolitan area encompassing Indianapolis-Carmel, Ind. has retained the title of most affordable major U.S. housing market for an eighth consecutive time, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) for Q2. On a nationwide basis, housing affordability remained well below the levels recorded prior to the price acceleration that accompanied the 2004-2005 housing boom, although there was at least some improvement from a year ago.

In the nation's most affordable major housing market of Indianapolis, approximately 87% of new and existing homes that were sold during the second quarter of this year were affordable to families earning the area's median household income of 63,800. Also near the top of the list for affordable major metros in the second quarter were Detroit-Livonia-Dearborn, Mich.; Youngstown-Warren-Boardman, Ohio-Pa.; Buffalo-Niagara Falls, N.Y.; and Grand Rapids-Wyoming, Mich., respectively.

Midwestern metros also dominated the list of the most affordable smaller housing markets (defined as those with fewer than 500,000 people). Kokomo, Ind., held the top of that list, followed by Bay City, Mich.; Lansing-East Lansing, Mich.; Mansfield, Ohio; and Saginaw-Saginaw Township North, Mich., in that order.

Maintaining its spot at the bottom of the affordability scale for an eleventh consecutive quarter was Los Angeles-Long Beach-Glendale, Calif., where just 3% of homes sold in the second three months of this year were affordable to families earning the metro's median household income of 61,700. As usual, Los Angeles shared the bottom of the affordability scale with other major California metros, including Santa Ana-Anaheim-Irvine as the second-least affordable, San Francisco-San Mateo-Redwood City as the third-least affordable and Modesto as the fifth-least affordable large housing markets in the nation. As the fourth-least affordable major metro, New York-White Plains-Wayne, N.Y.-N.J. was the only non-California location within the bottom five.

Continuing the trend, all five of the least affordable small cities (populations under 500,000) were located in California during the second quarter, with Salinas at the very bottom of the chart followed by Merced; Santa Barbara-Santa Maria-Goleta; San Luis Obispo-Paso Robles; and Napa, respectively.