C.A.R. reports entry-level housing affordability at 64 percent in the second quarter of 2010

LOS ANGELES, CA – August 19, 2010 – (RealEstateRama) — The percentage of households that could afford to buy an entry-level home in California stood at 64 percent in the second quarter of 2010, compared with 67 percent for the same period a year ago, according to a report released today 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 $266,750 in California in the second quarter of 2010 was $43,960, based on an adjustable effective interest rate of 4.09 percent and assuming a 10 percent down payment.  First-time buyers typically purchase a home equal to 85 percent of the prevailing median price.  The monthly payment including taxes and insurance was $1,470 for the second quarter of 2010. At $43,960, the minimum qualifying income was $4,051 greater than a year earlier when households needed $39,909 to qualify for a loan on an entry-level home.

At 84 percent, the High Desert region was the most affordable area in the state.  The San Luis Obispo County region was the least affordable in the state at 48 percent, followed by the San Francisco Bay region at 49 percent.

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with more than 155,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

C.A.R. First-time Buyer Housing Affordability Index

* — percentage of California households that can afford to purchase an entry-level home

r – revised

Source:  CALIFORNIA ASSOCIATION OF REALTORS®

Source:  CALIFORNIA ASSOCIATION OF REALTORS®

Quick Facts:

• C.A.R. First-time Buyer Housing Affordability Index stood at 64 percent in the second quarter of 2010 compared with 67 percent in the second quarter of 2009
• The median price of an entry-level home in California was $266,750 in the second quarter of 2010
• The estimated monthly payment including taxes and insurance was $1,470 in the second quarter of 2010
• The minimum household income needed to purchase an entry-level home in California in the second quarter of 2010 was $43,960.