Entry-level housing affordability more than doubles

Entry-level housing affordability more than doubles

For release:
Thursday, Nov. 20, 2008

C.A.R. reports entry-level housing affordability more than doublesin third quarter

LOS ANGELES (Nov. 20) The percentage of households that could afford to buy an entry-level home in California stood at 53 percent in the third 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 household income needed to purchase an entry-level home at $287,760 in California in the third quarter of 2008 was $56,100, based on an adjustable interest rate of 5.91 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 $1,870 for the third quarter of 2008.

At $56,100, the minimum qualifying income was 44 percent lower than a year earlier when households needed $100,500 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.

The First-Time Buyer Housing Affordability Index also rose 5 percentage points in the third quarter of this year compared to the second quarter of 2008, due to an 11.9 percent decrease in the entry-level median home price.

At 73 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 35 percent, followed by the San Luis Obispo County region at 38 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 180,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

C.A.R. First-Time Buyer Housing Affordability Index

	Q3 2008	Q2 2008		Q3 2007
California	53	48		24
California - Condos	57	52	r	38
United States	68	67		62
C.A.R. REGION
Central Valley	n.a.	n.a.		n.a.
High Desert	73	68		48
Los Angeles County	42	39		20
Monterey Region	51	40		16
Northern California	51	49		38
Northern Wine Country	49	43		24
Orange County	43	38	r	23
Palm Sprgs/Lwr Desert	59	48		33
Riverside/SBernardino	66	60		39
Sacramento County	71	68		46
San Diego County	51	45	r	24
San Francisco Bay	35	32		18
San Luis Obispo County	38	34		20
Santa Barbara Area	45	46		11
Santa Clara County	39	33		21
Southern California	52	47		24
Ventura County	50	48		25
COUNTY
Alameda	39	37		23
Contra Costa	30	29		16
Fresno	65	60		44
Marin	24	22		20
Merced	75	69		48
Riverside	66	59		36
San Bernardino	68	63		45
San Francisco	26	23		15
San Joaquin	n.a.	n.a.		n.a.
San Mateo	29	24		18
Santa Cruz	33	30		18
Sonoma	52	46		25
Stanislaus	n.a.	n.a.		n.a.

* -- percentage of California households that can afford to purchase a median-priced home

r – revised

Source: CALIFORNIA ASSOCIATION OF REALTORS®

	Housing Affordability Index	Entry-Level Price	Monthly Payment Including Taxes & Insurance	Minimum Qualifying Income
California	53	$287,760	$1,870	$56,100
California - Condos	57	$260,070	$1,690	$50,700
United States	68	$170,430	$1,110	$33,300
C.A.R. REGION
Central Valley	n.a.	n.a.	n.a.	n.a.
High Desert	73	$143,900	$930	$27,900
Los Angeles County	42	$332,680	$2,160	$64,800
Monterey Region	51	$313,510	$2,040	$61,200
Northern California	51	$278,430	$1,810	$54,300
Northern Wine Country	49	$327,850	$2,130	$63,900
Orange County	43	$439,660	$2,860	$85,800
Palm Sprgs/Lwr Desert	59	$187,270	$1,220	$36,600
Riverside/SBernardino	66	$193,130	$1,250	$37,500
Sacramento County	71	$180,170	$1,170	$35,100
San Diego County	51	$320,710	$2,080	$62,400
San Francisco Bay	35	$523,310	$3,400	$102,000
San Luis Obispo County	38	$356,120	$2,310	$69,300
Santa Barbara Area	45	$335,000	$2,180	$65,400
Santa Clara County	39	$552,500	$3,590	$107,700
Southern California	52	$289,650	$1,880	$56,400
Ventura County	50	$392,310	$2,550	$76,500
COUNTY
Alameda	39	$445,860	$2,900	$86,860
Contra Costa	30	$598,640	$3,890	$116,630
Fresno	65	$161,240	$1,050	$31,410
Marin	24	$805,050	$5,230	$156,840
Merced	75	$120,200	$780	$23,420
Riverside	66	$195,150	$1,270	$38,020
San Bernardino	68	$178,470	$1,160	$34,770
San Francisco	26	$645,050	$4,190	$125,670
San Joaquin	n.a.	n.a.	n.a.	n.a.
San Mateo	29	$661,210	$4,290	$128,820
Santa Cruz	33	$489,180	$3,180	$95,300
Sonoma	52	$323,280	$2,100	$62,980
Stanislaus	n.a.	n.a.	n.a.	n.a.

Source: CALIFORNIA ASSOCIATION OF REALTORS®

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