Affordable Housing!

For release:Tuesday, May 20, 2008
C.A.R. reports entry-level housing affordability rises 18 percentage points in first quarter
LOS ANGELES (May 20)—The percentage of households that could afford to buyan entry-level home in California stood at 44 percent in the first quarter of 2008,compared with 26 percent for the same period a year ago, according to a reportreleased today by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).
C.A.R.’s First-time Buyer Housing Affordability Index (FTB-HAI) measures thepercentage of households that can afford to purchase an entry-level home inCalifornia. C.A.R. also reports first-time buyer indexes for regions and selectcounties within the state. The Index is the most fundamental measure of housingwell-being for first-time buyers in the state.
The minimum household income needed to purchase an entry-level home at$356,350 in California in the first quarter of 2008 was $67,830, based on an adjustable interest rate of 5.65 percent and assuming a 10 percent down payment.First-time buyers typically purchase a home equal to 85 percent of the prevailingmedian price. The monthly payment including taxes and insurance was $2,260for the first quarter of 2008.
At $67,830, the minimum qualifying income was 30 percent lower than a yearearlier when households needed $96,500 to qualify for a loan on an entry-levelhome. Recent decreases in home prices and mortgage rates have broughtaffordability into better alignment with income levels of the typical Californiahousehold, where the median household income was $50,700.
The First-time Buyer Housing Affordability Index rose 11 percentage points in thefirst quarter of this year compared to the fourth quarter of 2007 due to a .56 pointdecrease in the mortgage rate and a 14.3 percent decrease in the entry-levelmedian home price.
At 64 percent, Sacramento County and the High Desert region were the mostaffordable areas in the state. Monterey was the least affordable area in the stateat 29 percent, followed by the San Francisco Bay Area at 30 percent.
Leading the way...® in real estate news and information for more than 100 years,the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of thelargest state trade organizations in the United States, with nearly 175,000members dedicated to the advancement of professionalism in real estate.C.A.R. is headquartered in Los Angeles.

Source: CALIFORNIA ASSOCIATION OF REALTORS®