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Entry Level Housing Affordability Rises

July 15th, 2008 1:33 PM by Lehel Szucs

C.A.R. reports entry-level housing affordability rises 18 percentage points in first quarter

LOS ANGELES (May 20)The percentage of households that could afford to buy
an entry-level home in California stood at 44 percent in the first quarter of 2008,
compared with 26 percent for the same period a year ago, according to a report
released today 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 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
$356,350 in California in the first quarter of 2008 was $67,830, based on an a
djustable interest rate of 5.65 percent and assuming a 10 percent down payment.
First-time buyers typically purchase a home equal to 85 percent of the prevailing
median price. The monthly payment including taxes and insurance was $2,260
for the first quarter of 2008.

At $67,830, the minimum qualifying income was 30 percent lower than a year
earlier when households needed $96,500 to qualify for a loan on an entry-level
home. Recent decreases in home prices and mortgage rates have brought
affordability into better alignment with income levels of the typical California
household, where the median household income was $50,700.

The First-time Buyer Housing Affordability Index rose 11 percentage points in the
first quarter of this year compared to the fourth quarter of 2007 due to a .56 point
decrease in the mortgage rate and a 14.3 percent decrease in the entry-level
median home price.

At 64 percent, Sacramento County and the High Desert region were the most
affordable areas in the state. Monterey was the least affordable area in the state
at 29 percent, followed by the San Francisco Bay Area at 30 percent.

Leading the way...® in real estate news and information for more than 100 years,
the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the
largest state trade organizations in the United States, with nearly 175,000
members dedicated to the advancement of professionalism in real estate.
C.A.R. is headquartered in Los Angeles.

C.A.R. FIRST-TIME BUYER HOUSING AFFORDABILITY INDEX *

C.A.R. Region

Q1 2008

Q4 2007

 

Q1 2007

 

California

44

33

 

26

r

California - Condos

50

42

 

37

r

United States

69

65

 

63

 

C.A.R. REGION

         

Central Valley

NA

NA

 

41

 

High Desert

64

54

 

44

 

Los Angeles County

35

27

 

21

r

Monterey Region

29

21

r

19

 

Northern California

48

42

 

37

 

Northern Wine Country

39

33

 

24

 

Orange County

36

28

 

25

 

Palm Sprgs/Lwr Desert

42

38

 

32

 

Riverside/SBernardino

57

46

 

37

r

Sacramento County

64

53

 

43

 

San Diego County

41

31

 

23

 

San Francisco Bay

30

23

 

24

 

San Luis Obispo County

32

28

 

21

 

Santa Barbara Area

33

21

 

12

 

Santa Clara County

31

24

 

27

 

Southern California

43

32

r

25

 

Ventura County

43

31

r

26

 

COUNTY

         

Alameda

34

27

 

25

 

Contra Costa

31

22

 

19

 

Fresno

56

47

 

44

 

Marin

24

22

 

21

 

Merced

61

51

 

46

 

Riverside

55

42

 

35

 

San Bernardino

59

46

 

41

r

San Francisco

23

20

 

18

 

San Joaquin

NA

NA

 

38

 

San Mateo

22

19

 

19

 

Santa Cruz

28

22

 

20

 

Sonoma

41

36

 

26

 

Stanislaus

NA

NA

 

40

 

* -- percentage of California households that can afford to purchase a median-priced home
r revised
Source: CALIFORNIA ASSOCIATION OF REALTORS®

 

1Q Housing
Affordability Index

Entry-Level Price

Monthly Payment Including Taxes & Insurance

Minimum
Qualifying Income

California

44

$356,350

$2,260

$67,830

California - Condos

50

$311,260

$1,970

$59,250

United States

69

$166,860

$1,060

$31,760

C.A.R. REGION

       

Central Valley

NA

NA

NA

NA

High Desert

64

$187,130

$1,190

$35,620

Los Angeles County

35

$390,450

$2,480

$74,320

Monterey Region

29

$495,830

$3,150

$94,380

Northern California

48

$296,580

$1,880

$56,460

Northern Wine Country

39

$396,020

$2,510

$75,380

Orange County

36

$508,200

$3,220

$96,740

Palm Sprgs/Lwr Desert

42

$273,710

$1,740

$52,100

Riverside/SBernardino

57

$244,040

$1,550

$46,450

Sacramento County

64

$219,680

$1,390

$41,820

San Diego County

41

$390,120

$2,480

$74,260

San Francisco Bay

30

$596,450

$3,780

$113,540

San Luis Obispo County

32

$408,540

$2,590

$77,770

Santa Barbara Area

33

$434,660

$2,760

$82,740

Santa Clara County

31

$663,000

$4,210

$126,200

Southern California

43

$358,100

$2,270

$68,170

Ventura County

43

$453,890

$2,880

$86,400

COUNTY

       

Alameda

34

$497,850

$3,160

$94,770

Contra Costa

31

$598,150

$3,800

$113,860

Fresno

56

$202,760

$1,290

$38,600

Marin

24

$827,360

$5,250

$157,490

Merced

61

$177,360

$1,130

$33,760

Riverside

55

$254,940

$1,620

$48,530

San Bernardino

59

$228,050

$1,450

$43,410

San Francisco

23

$688,270

$4,370

$131,020

San Joaquin

NA

NA

NA

NA

San Mateo

22

$765,000

$4,850

$145,620

Santa Cruz

28

$548,780

$3,480

$104,460

Sonoma

41

$395,040

$2,510

$75,200

Stanislaus

NA

NA

NA

NA

           

Source: CALIFORNIA ASSOCIATION OF REALTORS®

Posted in:General
Posted by Lehel Szucs on July 15th, 2008 1:33 PM

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