Happy Halloween! Coming out of the great recession, fear caused by the housing market was still a very real thing, and there is still a lot of hesitation from many about the health of the industry -- but there are five places where housing fear should turn to relief.
Every quarter the National Association of Home Builders (NAHB) and Wells Fargo release the Housing Opportunity Index, which seeks to measure the number of homes that were sold in a city that would be considered affordable based on a number of factors (home price, median income, taxes, etc.).
Surprisingly, this number can undergo a lot of variation from year to year, and even quarter to quarter. As of the most recent quarter this index stood at 69.3%, as shown in the chart below:
While affordability has trended down in recent quarters from the peak seen in the first quarter of 2012, Rose Quint, Assistant VP of Survey Research at the NAHB said that this shouldn't cause fear in the eyes of the public as "it is still a historically high number -- what happened was in increase in the median price nationwide," which rose from an average of $184,000 to $202,000.
In fact, rising prices could actually be a good thing; although affordability dipped, rising prices likely spurred on the economy.
As you can see in the chart above, over the last seven years, affordability has jumped from 40.4% to 69.3% -- and there are many markets that are well above the valleys seen in their own charts, and have moved past the lack of affordability that once plagued them.
The Motley Fool takes a look at five major housing markets that were once scary over the last 10 years, but aren't so much anymore.
Fool contributor Patrick Morris has no position in any stocks mentioned. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.