Affordability More than Doubles in California
January 27, 2009 by admin
Filed under foreclosures
Just got this off of David Hoshaw’s Newsletter. He is a Santa Clarita Valley Realtor.With a decline in home resale prices and recent drops in mortgage interest rates (around 5% today) are prompting more people to jump into a market that is dramatically more inviting for entry-level buyers.
A study conducted recently found that 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. That’s more than double for the same period from a year ago when only 24 percent of households could qualify.
The First-Time Buyer Housing Affordability Index study conducted by the California Association of Realtors found that 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. 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.
In Los Angeles County the index stood at 42 percent, up from 20 percent a year ago. The L.A. entry-level price of $332,680 requires a minimum-qualifying income of only $64,800 and comes with a monthly loan payment of $2,160. A condo can start near $100,000 and will require less income.
