CALIFORNIA HOUSING AFFORDABILITY SKYROCKETS
FHA LOANS, INDUSTRY NEWS, TIPS FOR BUYERS
August 23rd, 2008
California Association of Realtors (CAR) reported today that housing affordability doubled in the second quarter of 2008 compared to a year ago. 48% of households can afford to purchase an entry-level home in California compared to only 24% a year ago. CAR’s index, the First Time Buyer Housing Affordability Index (FTB-HAI) measures the percentage of households that can afford to purchase an entry level home.
A buyer needs an income of $62,870 to qualify to buy an entry level home priced at $329,120. The assumptions used are a 10% downpayment and an adjustable rate of 5.69%. Personally, I would recommend a buyer buy less house than they qualify for and use a 30-year fixed rate loan. Here, in the Redding area, the median home price is under $250,000 and FHA loans would allow a buyer to make a 3% downpayment. The cities of Redding, Shasta Lake and Anderson and the County of Shasta have downpayment assistance programs that can make owning cheaper than renting. Check with their housing departments for funds availability and income limitations.
The most affordable area in California is the High Desert (think Barstow) at 68% and a median price of $166,590. If you would rather leave your heart in San Fransisco, the median price is $582,130 which corresponds to a FTB-HAI of 32%. Northern California, which is the area Redding is lumped into, sits at 49% with a median price of $290,460.
Not only have homes become more affordable, interest rates have inched downward this week after creeping up the last few weeks. Currently, the par rate for a 30-year fixed rate mortgage sits just over 6.5%.
Buying, selling, investing? Contact me:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
