Only half a decade ago, any discussion of Palm Beach County's housing market centered on concerns that the middle class no longer could afford to live here.

What a difference five years makes. With plummeting home prices, record-low mortgage rates and steady incomes, Palm Beach County has transformed into a bastion of affordability.

Housing affordability hit record levels in the first three months of 2012, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index released this month.

During the first quarter, the typical home sold in Palm Beach County was in reach for 77.5 percent of Palm Beach County families. That's based on a median price of $120,000 for new and existing houses and condos and a median family income of $64,000.

Palm Beach County's affordability index stood at its highest point in the 21 years that the builders group and Wells Fargo have tracked the measure. The index also hit 77.5 percent in the first quarter of 2011.

Soaring affordability is the bright side of an otherwise disastrous housing crash. Homes again are in reach for first-time buyers, retirees from elsewhere and workers considering moving here for jobs.

Jeff Stoops, chief executive of SBA Communications in Boca Raton, said recruiting out-of-state workers has grown less difficult as the affordability squeeze has eased.

During the boom, Stoops said, potential employees were put off by "the perceived disconnect between housing prices and salaries. That has somewhat corrected itself."

For much of 2006 and 2007, fewer than 30 percent of homes sold in Palm Beach County were priced in the affordability range of a median-income family. During those years, the median combined price of houses and condos was close to $300,000, but incomes were essentially the same as they are now.

Another driver of affordability: record-low mortgage rates. The average 30-year loan cost a microscopically low 3.78 percent this week, according to mortgage giant Freddie Mac.

But good luck qualifying for that rate. In another major difference from the housing boom, today's lenders require big down payments and squeaky-clean credit scores.

"The difficulty of getting financing is really kind of holding back the recovery in the housing market," said John Tuccillo, chief economist at Florida Realtors. "The biggest hang-up is not prices or affordability. It's the availability of financing."

With lenders' stringent standards, many homes sell for cash to deep-pocketed investors.

"It's not the end user that's buying for $120,000," said real estate broker Myles Minns, owner of Continental Properties in West Palm Beach. "It's the investor who's turning around and renting it out to the median-­income family."

The story is the same throughout the country. National affordability hit a record high in the first quarter, according to the National Association of Home Builders and a separate index created by the National Association of Realtors.

Yet loans are hard to come by.

"Homes in this year's first quarter were more affordable than they have been at any time in more than 20 years," said Barry Rutenberg, chairman of the National Association of Home Builders and a builder in Gainesville. "Yet many potential sales are not happening because of overly tight lending conditions that are keeping hardworking families from obtaining a suitable mortgage."

For economic developers keen to lure employers here from higher-cost cities, Palm Beach County's rising affordability removes a competitive disadvantage. In New York, for instance, only 31.5 percent of the homes sold in the first quarter were affordable to a median-income family. In San Francisco, the index was 39.9 percent, despite a median income of nearly $103,000.

But many large cities are every bit as affordable as Palm Beach County. The housing affordability index stood at 78 percent in Chicago, 78.1 percent in Washington, 79.2 percent in Philadelphia and 85.4 percent in Atlanta, underscoring that Florida isn't the only market where prices have fallen.

Courtesy of Palm Beach Post