RISMEDIA, February 20, 2009-The percentage of households that could afford to buy an entry-level home in California stood at 59% in the fourth quarter of 2008, compared with 33% for the same period a year ago, according to a report released this week by the California Association Of Realtors® (C.A.R.).
According to the Association, C.A.R.’s First Time Buyer Housing Affordability Index (FTB-HAI) measures the percentage of households that can afford to purchase an entry-level home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being for first-time buyers in the state.
The minimum household income needed to purchase an entry-level home at $248,030 in California in the fourth quarter of 2008 was $48,900, based on an adjustable interest rate of 6.02% and assuming a 10% down payment. First-time buyers typically purchase a home equal to 85% of the prevailing median price. The monthly payment including taxes and insurance was $1,630 for the fourth quarter of 2008.
At $48,900, the minimum qualifying income was 42% lower than a year earlier when households needed $83,700 to qualify for a loan on an entry-level hold. Recent decreases in home prices and mortgage rates have brought affordability into better alignment with income levels of the typical California households, where the median household income is $59,160.
At 76%, the High Desert region was the most affordable area in the state. The San Luis Obispo County region was the least affordable in the state at 44%, followed by the Los Angeles County region at 46%.
The First-Time Buyer Housing Affordability Index also rose 6 percentage points in the fourth quarter of this year compared with the third quarter of 2008, due to a 14.1% decrease in the entry-level median home price.
For more information, visit www.car.org.
Copyright© 2016 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.
Content on this website is copyrighted and may not be redistributed without express written permission from RISMedia. Access to RISMedia archives and thousands of articles like this, as well as consumer real estate videos, are available through RISMedia's REsource Licensed Content Solutions. Offering the industry’s most comprehensive and affordable content packages. Click here to learn more! http://resource.rismedia.com