Housing Affordability Remains High For First-Time Buyers
INDUSTRY NEWS, LOCAL GOVERNMENT, SHASTA COUNTY, TIPS FOR BUYERS
February 18th, 2010
Lower home prices combined with low interest rates bumped up the First-Time Buyer Housing Affordability Index (FTB-HAI) for California to 64%. During the bubble, this index bottomed out just over 20%. This number reflects the number of households that can afford an entry-level home assuming a 10% down payment and an adjustable interest rate of 4.5%.
I would prefer this index be calculated using a stable 30-year fixed rate loan. The high usage of adjustable rate loans caused many of the problems we are dealing with today. The California Association of Realtors (CAR) also tracks affordability for certain counties and regions within the state. The most affordable region is the High Desert at 84%. The area of San Luis Obispo won the least affordable honor at 48%.
Here’s how other regions ranked:
- United States-77%
- Northern California-65%
- Northern Wine Country-58%
- Southern California-63%
- San Diego-57%
By county:
- Sacramento County-79%
- Merced-84%
- Riverside-78%
- Marin County-40%
- San Fransisco-35%
The Redding area is lumped in with Northern California. Sacramento has higher affordability due to higher incomes. The index compares median incomes to median home prices to determine affordability. Despite a lower median price in Shasta County, lower incomes prevent our area from ranking higher by this index. Statewide the median price for the 4th quarter 2009 was $257,940. The minimum household income needed to purchase the median priced home is $44,100.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN REDDING
MORE THAN 25 YEARS LOCAL SALES EXPERIENCE
