CALIFORNIA HOME AFFORDABILITY MORE THAN DOUBLES
HOME LOANS, INDUSTRY NEWS, TIPS FOR BUYERS
November 23rd, 2008
At the peak of the market, California had one of the worst affordability indexes in the nation at 24%. Inman News reported Friday that that index has increased to 53% statewide. Although I don’t agree on the criteria used to determine the Affordability Index, it is a barometer of how many Californians can qualify to buy an entry-level home. Declines in both prices and interest rates have opened the door for many first-time buyers frozen out of the market during the peak.
A household with a median income of $56,100, using a 5.91% ARM and making a 10% downpayment, can purchase a home priced at $287,760. The monthly payment would be $1,870/month including taxes and insurance. I prefer my clients buy a less expensive home and use a safer 30-year fixed rate loan. Today, we are seeing the end result of too many buyers using risky mortgages to buy the American dream- foreclosure!
If you don’t mind living in the Barstow area, you will find home prices less than $150,000 and the highest affordability index of 73%. Nationally, the Housing Affordability Index sits at 68% today. The Bay Area counties of Marin, San Mateo and San Fransisco rank lowest for affordability with indexes of 24%, 29% and 26% respectively.
Redding/Shasta County are lumped into Northern California with a 51% affordability index. The median price in Redding currently sits just over $200,000.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
