My Real Estate Blog

More Californians able to afford homes

Lower home prices and interest rates led to an increase in home affordability in the third quarter, the CALIFORNIA ASSOCIATION OF REALTORS® reported.

Making sense of the story

• The percentage of California households that could afford to purchase a median-priced home of $292,120 rose to 52 percent in the third quarter, up from 51 percent in the second quarter.
  
• C.A.R.’s HAI measures the percentage of all households that can afford to purchase a median-priced, single-family home in California. C.A.R. also reports affordability indices for regions and select counties within the state.
  
• Home buyers needed to earn a minimum annual income of $61,530 to qualify for the purchase of a $292,120 statewide median-priced, existing single-family home in the third quarter of 2011. The monthly payment, including taxes and insurance, would be $1,540, assuming a 20 percent down payment and an effective composite interest rate of 4.63 percent.
  
• Regionally, housing affordability rose in most counties in the San Francisco Bay Area but was down in Los Angeles County and Fresno County. At 77 percent, San Bernardino County was the most affordable, while San Mateo County was the least affordable, with only 25 percent of households able to purchase the county’s median-priced home.

Reprinted From C.A.R.