Cities where homes are most affordable

Home prices are strengthening and affordability of houses is slightly lower, according to new data from the second quarter of 2012. The National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) found that 92 percent of metropolitan areas had a rise in median home prices over the first quarter of 2012.

Some homebuyers might not welcome this news, but for the home seller, it’s “another signal that the housing recovery is starting to take root,” said NAHB Chairman Barry Rutenberg, “and it lends needed confidence to prospective buyers and sellers who have been reluctant to move forward in the current marketplace.”

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According to the report, 73.8 percent of all homes sold during this period were affordable to households earning the mean national income of $65,000.

Looking at the bottom of that list, major metropolitan areas with the least affordable homes, the number one city is no surprise: New York-White Plains-Wayne, N.Y.-N.J. (a distinction it’s held for 17 consecutive quarters), followed by the metro areas of San Francisco, Bridgeport-Stamford-Norwalk, Conn., four other California areas as well as Honolulu and Miami.

Now let’s look at the top five major metropolitan housing markets with the most affordable homes for sale, counting down to No. 1.

5. Modesto, Calif.
Median housing price: $135,000

Located in Northern California’s Central Valley and earning a Housing Opportunity Index rating of 91.5, Modesto offers affordable housing within reach to households earning the city’s median income of $62,000.

4. Indianapolis-Carmel, Ind.
Median housing price: $114,000

The metropolitan area of Indiana’s state capital has an HOI of 91.7, finding most homes on the market affordable for families earning the median income of $66,900.

3. Buffalo-Niagara Falls, N.Y.
Median housing price: $105,000

With an HOI of 91.8, most households earning the median income of $66,100 in this major metropolitan area near Lake Erie would be able to buy a house currently on the market.

2. Dayton, Ohio
Median housing price: $92,000

Dayton has a Housing Opportunity Index rating of 92, meaning that most “Gem City” residents making the local median of $63,300 can feasibly buy homes in the city.

1. Youngstown-Warren-Boardman, Ohio-Pa.
Median housing price: $92,000

The city with the most affordable homes had an HOI of 93.4, so the vast majority of people earning the local median income of $55,700 (the second lowest median income of this top 10 list) can afford homes in the Youngstown metro area.

To see the rest of the top 10 cities where homes are most affordable, visit CNBC's website.