Housing affordability falls further in California

LOS ANGELES
November 27, 2006 12:23pm

The percentage of first-time buyers in California able to afford a median-priced home stood at 24 percent in the third quarter of 2006, compared with 28 percent for the same period a year ago, according to a report released Monday by the California Association of Realtors.

According to the Realtors’ calculations, the minimum household income first-time buyers needed to purchase a home at $478,710 in California was $98,890, based on an adjustable interest rate of 6.58 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 Realtors’ say. The monthly payment including taxes and insurance was $3,300 for the third quarter of 2006.

At 39 percent, the High Desert region was the most affordable C.A.R. region in the state, followed by the Sacramento region at 38 percent.

The Central Valley outside of the Sacramento region had an affordability index of 36 percent, down 2 percentage points in a year.

Santa Barbara was the least affordable region in the state at 14 percent, followed by Monterey at 17 percent.

Within the Central Valley, Fresno and Merced counties, each if an affordability index of 39 percent, were the most affordable of those surveyed.

Stanislaus had an affordability index of 35 percent, down 3 percentage points from a year earlier, and San Joaquin had an index of 27 percent, down 7 percentage points, according to the Realtors.

CAR’s figures are based on its surveys of member organizations. They do not reflect all sales, such as homes sold by owners or by real estate agents not part of the Realtor surveys.