As more diverse markets improve, demand for affordable housing remains steadfast

Affordable housing demand is still high, although stabilized, amid a growing number of improving markets.

A net improvement in the number of markets experiencing thorough recoveries in the housing market may have zero impact on the consistent demand for affordable housing in California.

As reported by the National Association of Home Builders, the NAHB/ First American Improving Markets Index recently revealed the total number of housing markets gaining positive momentum in the U.S. grew to 263.

"The continued strength of the IMI is an indicator of the ongoing, positive momentum in housing markets nationwide as consumers move to take advantage of historically favorable interest rates and affordable home prices," added Kurt Pfotenhauer, vice chairman of First American Title Insurance Company.

The IMI is known for being a comprehensive assessment of local markets. Not only does it take into account  the potential for price increases in the future, it also uses single-family permit growth and employment data as economic barometers. A metro area must experience consecutive improvement in each of these areas for six months in order to make the list.

"This is the fifth consecutive month in which the IMI has designated more than 70 percent of U.S. metros as improving," said Rick Judson, chairman of the NAHB. "While that's a good sign that the housing recovery is on solid footing, we know that various challenges are slowing its progress – including continuing issues with credit availability for builders and buyers, as well as appraisals that aren't keeping up with the rising cost of construction."

Affordable housing in California
Of the amalgam of metropolitan area to join the IMI list, unexpected markets such as Sioux City, Iowa and Chicago, Ill. joined the fray. Salinas, Calif., also made the list. 

According to the National Real Estate Investor, WNC, an investment company based in Irvine, Calif., has recently announced the closing of a $46 million fund intended for affordable housing units in the state. This will include 10 properties and 800 housing units, benefiting families and seniors, as well as existing properties slated for renovation. 

During the recession, the affordable housing sector continued expanding, unlike most other commercial real estate sectors. That money will be combined with federal, state and local tax incentives to help finance commercial real estate companies interested in constructing affordable housing developments. As outlined by the National Council of State Housing Agencies, more than 100,000 new units of affordable housing are built each year with the use of such programs.

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