Entry-level housing affordability reached 67 percent in Q2 09

Friday, August 14, 2009
Quick Facts:
· C.A.R. First-time Buyer Housing Affordability Index stood at 67 percent in the second quarter of 2009 compared with 49 percent (revised) in the second quarter of 2008
· The median price of an entry-level home in California was $224,180 in the second quarter of 2009
· The estimated monthly payment including taxes and insurance was $1,330 in the second quarter of 2009
· The minimum household income needed to purchase an entry-level home in California in the second quarter of 2009 was $39,930

C.A.R. reports entry-level housing affordability reached 67 percent in the second quarter of 2009

LOS ANGELES (Aug. 14) The percentage of households that could afford to buy an entry-level home in California stood at 67 percent in the second quarter of 2009, compared with 49 percent (revised) 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 $224,180 in California in the second quarter of 2009 was $39,930, based on an adjustable interest rate of 4.92 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 $1,330 for the second quarter of 2009.

At $39,930, the minimum qualifying income was 34 percent lower than a year earlier when households needed $60,460 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 $61,030.

The First-time Buyer Housing Affordability Index declined 2 percentage points in the second quarter of this year compared with the first quarter of 2009, due to a 6.4 percent increase in the price of an entry-level home.

At 86 percent, the High Desert region was the most affordable area in the state. The San Luis Obispo County region was the least affordable in the state at 50 percent, followed by the Orange County region at 53 percent.

Leading the way…® in California real estate 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 more than 163,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

C.A.R. Region	Q2 2009	Q1 2009		Q2 2008
California	67	69		49	r
California – Condos	70	72		54	r
United States	76	77		69	r
High Desert	86	83		70	r
Los Angeles County	56	57		41	r
Monterey Region	71	71		42	r
Northern California	62	63		54	r
Northern Wine Country	59	60		41	r
Orange County	53	56		40	r
Palm Sprgs/Lwr Desert	76	75		49	r
Riverside/SBernardino	79	77		62	r
Sacramento County	79	80		70	r
San Diego County	59	60		46	r
San Francisco Bay	55	62		33	r
San Luis Obispo County	50	49		36	r
Santa Barbara Area	55	64		42	r
Santa Clara County	58	62		34	r
Southern California	67	68		48	r
Ventura County	59	65		50	r
County
Alameda	55	62		39	r
Contra Costa	43	50		31	r
Fresno	78	77		62	r
Marin	37	41		23	r
Merced	84	84		71	r
Riverside	79	77		60	r
San Bernardino	82	79		64	r
San Francisco	36	39		25	r
San Mateo	39	51		26	r
Santa Cruz	46	53		31	r
Sonoma	62	63		48	r

* — percentage of California households that can afford to purchase an entry-level home
r – revised

Source:  CALIFORNIA ASSOCIATION OF REALTORS®

Source:  CALIFORNIA ASSOCIATION OF REALTORS®