Lower interest rates helped make homes more affordable to median-income families even as house prices continued to inch up in metro areas across the country in the third quarter, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), released recently.

Nationwide, 74.1 percent of all homes sold in this year's third quarter were affordable to families earning the U.S. median income of $65,000. This was up slightly from the 73.8 percent of homes sold that were affordable to median-income earners in the second quarter.

"The latest housing affordability data is good news on two fronts, because it shows that the share of homes affordable to median-income earners has risen even as home prices have continued to gradually recover from their recession lows," noted NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. "This is primarily due to the fact that mortgage rates are now lower than we've seen them since the HOI was initiated more than a decade ago. That said, given today's overly tight lending conditions, we know that it remains very difficult for potential buyers to qualify for and obtain those great rates."

"The median price of all new and existing homes sold in the third quarter was $189,000, which was up from $176,000 in last year's third quarter and the strongest number we've seen since the final three months of 2008," explained NAHB Chief Economist David Crowe. "But at the same time, mortgage rates were at their lowest levels in decades, which kept homes quite affordable. Clearly, for families who qualify for a mortgage at such favorable terms, the outlook is brightening -- but being able to afford a home and getting approved for a mortgage are still two different things in the current marketplace."

Topping the affordability list for the first time in the HOI's history, Ogden-Clearfield, Utah, was named the most affordable major housing market in the country in the third quarter. There, 93.2 percent of all new and existing homes sold between July and September of this year were affordable to families earning the area's median household income of $71,500.

Also ranking among the most affordable major housing markets in respective order were Youngstown-Warren-Boardman, Ohio-Pa; Indianapolis-Carmel, Ind.; Lakeland-Winter Haven, Fla.; and Toledo, Ohio.

Among smaller housing markets, Fairbanks, Alaska, retained its standing at the top of the affordability chart with an incredible 99.4 percent of all homes sold there in the third quarter being affordable to families earning the area's median income of $92,900. Other smaller housing markets at the top of the index included Mansfield and Lima, Ohio; Wheeling, W.Va.-Ohio; and Kokomo, Ind.

Meanwhile, New York-White Plains-Wayne, N.Y.-N.J. retained the title of the least affordable major housing market in the country for an 18th consecutive quarter, with just 28.5 percent of homes sold there being affordable to families earning the area's median income of $68,300.

Other major metros at the bottom of the affordability chart included perennial entrants San Francisco-San Mateo-Redwood City, Santa Ana-Anaheim-Irvine and Los Angeles-Long Beach-Glendale, Calif., as well as Bridgeport-Stamford-Norwalk, Conn., in that order.  

The least affordable small housing market in the third quarter was Santa Cruz-Watsonville, Calif., with just 44.4 percent of homes sold being within reach of families earning the median income of $87,000. Other small metros at the bottom of the list included Ocean City, N.J.; San Luis Obispo-Paso Robles, Calif.; Laredo, Texas; and Santa Barbara-Santa Maria-Goleta, Calif., respectively.

Please visit www.nahb.org/hoi for tables, historic data and details.