Entry-Level Housing Affordability Reaches 67% in Second Quarter of 2009

RISMEDIA, August 22, 2009-The percentage of households that could afford to buy an entry-level home in California stood at 67% in the second quarter of 2009, compared with 49% (revised) for the same period a year ago, according to a report recently released 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% and assuming a 10% down payment. First-time buyers typically purchase a home equal to 85% 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% 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% increase in the price of an entry-level home.

At 86%, 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%, followed by the Orange County region at 53%.

For more information, visit www.car.org.

If you would like to buy or sell Wilmington, NC real estate, contact Sandy and Steve Thornton for all your home buying and selling needs. Specializing in Wilmington, Leland, Hampstead, Sneads Ferry, Jacksonville, Topsail Island including Surf City, Topsail Beach, North Topsail Beach, Beach and waterfront properties covering New Hanover County, Pender County, Brunswick County and Onslow County areas