Dayton one of top 5 markets for housing affordability

Springfield market also in Top 10 in US

The Dayton region once again is one of the top five most affordable major housing markets in the nation, says a report released Thursday by the National Association of Home Builders.

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.

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.

Best deals

The most affordable major U.S. market was Indianapolis, where more than three-fourths 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.

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.

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. Sen. 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 communities.

“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 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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