Stronger job creation from the Dakotas and Nebraska to Oklahoma and Texas is translating into stable home price trends and, in turn, record home affordability.

The National Association of Realtors housing affordability index rose to a record 184.5 in 2011, based on the median home price, median family income and average mortgage interest rate.

An index of 100 is defined as the point where a median-income household has exactly enough income to qualify for the purchase of a median-priced existing single-family home. The higher the index, the greater the household purchasing power.

Housing affordability conditions improved in most metropolitan areas because of softer existing-home prices and record-low mortgage interest rates in the fourth quarter, with rising sales and lower inventory creating more balanced conditions, according to NAR.

Metro areas with the greatest home affordability in 2011 include Detroit-Warren-Livonia, Mich. at 383.4, Toledo, Ohio, at 242.9 and Decatur, Ill. at 236.8. Only 24 out of 152 metros measured had an affordability index below 100 in 2011.

“Clearly, the Midwest has the greatest concentration of areas where homebuyers have the strongest purchasing power, followed by the South,” NAR chief economist Lawrence Yun said. “Metros on the West Coast and along the Northeastern seaboard have generally higher-priced homes, which account for lower affordability.”

All four U.S. regions experience drops in unemployment in 2011. But the Midwest saw the furthest decline in terms of distance and end result, with the region's unemployment rate falling to 7.9% in December from from 8.7% in December 2010.

Nationally, total existing-home sales increased 9.2% in the fourth quarter to an annualized rate of 4.42 million from 4.04 million a year earlier and 5.9% from 4.17 million in the previous quarter. All regions rose from the third quarter and from a year ago.

Conversely, the national median existing single-family home price decreased 4.2% in the quarter to $163,500 from $170,600 in the year-earlier period. Distressed homes, which sold at discounts averaging 15% to 20%, accounted for 30% of sales in the quarter versus 34% a year earlier.

Median price measurement can be skewed because the level of distressed sales — foreclosures and short sales — which artificially depress median prices, can vary notably in given markets.

For example, in Illinois, home sales rose 14.8% in the fourth quarter to 25,394 from 22,114 a year earlier, but the median home price fell 10.8% to $128,000 from $143,500 a year ago. The opposing directions reflect the downward pressure distressed sales continue to have on property values.

At the end of the fourth quarter there were 2.38 million existing homes available for sale across the country, 21.2% lower than at the close of the fourth quarter 2010 when there were 3.02 million homes on the market.

Yun said the figures reflect greater home sales activity at lower price points.

“Sales have risen strongly in lower price ranges from one year ago, while sales at the upper end remain sluggish,” he said. “More importantly, we’re seeing a consistent trend of declining inventory, which means supply and demand conditions are becoming more balanced in more areas, which will help stabilize home prices.”