RISMEDIA, February 25, 2010—The percentage of households that could afford to buy an entry-level home in California remained at 64% in the fourth quarter of 2009, compared with 61% (revised) for the same period a year ago, according to a report released by the California Association of Realtors® (C.A.R.).
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 one of the most fundamental measures of housing well-being for first-time buyers in the state.
The minimum household income needed to purchase an entry-level home at $257,940 in California in the fourth quarter of 2009 was $44,100, based on an adjustable interest rate of 4.5% 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 $1,470 for the fourth quarter of 2009.
At $44,100, the minimum qualifying income was 4% lower than a year earlier when households needed $45,900 to qualify for a loan on an entry-level home. Home prices remained below peak levels, resulting in an improvement in housing affordability compared with the previous year.
At 84%, 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 48%, followed by the San Francisco Bay region and Santa Barbara area both at 50%.
For more information, visit www.car.org.