Percentage of Households That Could Afford To Buy

RISMEDIA, Feb. 21, 2008-The percentage of households that could afford to buy an entry-level home in California stood at 33% in the fourth quarter of 2007, compared with 25% for the same period a year ago, according to a report 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 $411,170 in California in the fourth quarter of 2007 was $82,200, based on an adjustable interest rate of 6.21% 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 $2,740 for the fourth quarter of 2007.
At 54%, the High Desert region was the most affordable in the state, followed by the Sacramento region at 53%. Monterey was the least affordable region in the state at 20%, followed by the Santa Barbara region at 21%.
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