C.A.R. reports entry-level housing affordability increases 50 percent in second quarter 2008 compared with a year ago
LOS ANGELES (Aug. 19) The percentage of households that could afford to buy an entry-level home in California stood at 48 percent in the second quarter of 2008, compared with 24 percent for the same period a year ago, according to a report released today by the CALIFORNIA ASSOCIATION OF REALTORS®.
C.A.R.’s First Time Buyer Housing Affordability Index (FTB-HAI) measured 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 housing income needed to purchase an entry-level home at $329,120 in California in the second quarter of 2008 was $62,870, based on an adjustable interest rate of 5.69 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 $2,100 for the second quarter of 2008.
At $62,870, the minimum qualifying income was 38 percent lower than a year earlier when households needed $101,440 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 households, where the median household income is $59,160.
|
C.A.R. FIRST-TIME BUYER HOUSING AFFORDABILITY INDEX* |
Q2 2008 |
Q1 2008 |
Q2 2007 |
|
San Diego County |
n.a. |
41 |
23 |
|
Riverside/San Bernardino |
60 |
57 |
37 |
|
Riverside |
59 |
55 |
35 |
|
Southern California |
47 |
43 |
23 |
|
California – Condos |
51 |
50 |
36 |
|
California |
48 |
43 |
24 |
|
United States |
67 |
69 |
62 |
The First-Time Buyer Housing Affordability Index also rose five percentage points in the second quarter of this year compared to the first quarter of 2008, due to an 8.6 percent decrease in the entry-level median home price.
At 68 percent, the High Desert region was the most affordable area in the state. The San Francisco Bay Area region was the least affordable in the state at 32 percent, followed by the Santa Clara region at 33 percent. The Monterey, Northern Wine Country, Palm Springs/Lower Desert, Santa Barbara County, Southern California, Merced, Riverside, and Sonoma regions all reached record-high affordability levels in the second quarter of 2008.
If you have been waiting for the right time to buy this is it, call us today or go to our website www.countyforeclosures.com .