Indianapolis, Ind., was the nation?EUR??,,????'???s most affordable major housing market for a second consecutive quarter at year-end 2005, according to the National Association of Home Builders?EUR??,,????'???/Wells Fargo Housing Opportunity Index (HOI).

Meanwhile, higher interest rates and rising home prices caused nationwide housing affordability to slip for a fourth consecutive quarter to its lowest level on HOI record.

?EUR??,,????'??The latest HOI shows that only 41 percent of new and existing homes that were sold during the final quarter of 2005 were affordable to families earning the national median income,?EUR??,,????'?? said David Pressly, NAHB president. ?EUR??,,????'??This is down from 43.2 percent of homes sold in the third quarter and 52 percent of homes sold in the final quarter of 2004.?EUR??,,????'??

NAHB forecasts predict that the average rate on a 30-year, fixed-rate mortgage will inch up gradually to about 6.6 percent late in 2006 and average about 6.5 percent for the year as a whole.

?EUR??,,????'??Between the third and fourth quarters of last year, the national weighted interest rate on fixed and adjustable-rate mortgages that we use in calculating the HOI rose from 5.84 percent to 6.21 percent, and this certainly increased the threshold for families seeking homeownership,?EUR??,,????'?? said NAHB Chief Economist David Seiders.

In the nation?EUR??,,????'???s most affordable major housing market of Indianapolis, Ind., 88.7 percent of new and existing homes that were sold in the fourth quarter were affordable to households earning the area?EUR??,,????'???s median income of $64,000. The median sales price of all Indianapolis homes sold in that time frame was $120,000. Also near the top of the list for affordable major metros were Youngstown-Warren-Boardman, Ohio-Pa., followed by Detroit-Livonia-Dearborn, Mich.; Grand Rapids-Wyoming, Mich.; and Dayton, Ohio, in that order.

Midwestern metros also dominated the list of the most affordable small housing markets with fewer than 500,000 people. Davenport-Moline-Rock Island, Iowa-Ill. was tops, followed by the metro areas of Cumberland, Md.-W.Va.; Lima, Ohio; Mansfield, Ohio; and Lansing-East Lansing, Mich.

At the bottom of the affordability scale was Los Angeles-Long Beach-Glendale, Calif., where just 2.3 percent of homes sold in the fourth quarter were affordable to families earning the area?EUR??,,????'???s median household income of $54,500. The median price of all homes sold in that area was an even $500,000. And as usual, the bottom of the affordability scale was dominated by large California cities, including Santa Ana-Anaheim-Irvine, San Diego-Carlsbad-San Marcos, and Stockton. New York-White Plains-Wayne, N.Y.-N.J. rounded out the list of the five least-affordable major housing markets.