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More Californians able to afford homes

Lower prices and interest rates lead to a third-quarter increase in those who can afford a home at the statewide median to 52%, up from 51% in the previous quarter, according to a Realtor group's index.

It's the silver lining of falling home prices: With low interest rates and cheaper housing, the percentage of Californians who could afford to buy a home increased in the third quarter, a real estate group said.

The portion of households that could afford a home priced at the statewide median of $292,120 rose to 52%, up from 51% in the previous quarter, according to an index released Thursday by the California Assn. of Realtors.

Beth L. Peerce, president of the group, said that one problem potential home buyers could face is tight credit. Many first-time buyers don't qualify for a loan, she said.

Some analysts have noted that banks have tightened their loan criteria since the housing crash. But it was those loose lending standards that caused the real estate bubble in the first place, so many other analysts argue that more carefully scrutinizing borrowers is appropriate.

The federal government has been providing enormous support to the mortgage market through loans backed by theFederal Housing Administration, although it has recently taken steps to scale back that support.

In California, potential buyers needed to earn at least $61,530 a year per household to afford a home at the third quarter's median price, the Realtors group said. The median is the point at which half the homes in the state sold for more and half sold for less.

The real estate group calculated the monthly payment for a mortgage on such a home to be $1,540, including taxes and insurance, and assuming a 20% down payment and a 4.63% interest rate.