Home Affordability in L.A. Falls in May

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The number of people who could afford to purchase median-priced homes in the Los Angeles region fell sharply in May from the year-earlier period, the California Association of Realtors said. Affordability in April was down one percentage point from March.


The monthly California Housing Affordability Index, a measure of home affordability based on home prices, income and mortgage rates and other housing costs, showed that 15 percent of L.A. households could afford to purchase a median-priced home in May, down from 18 percent in May 2004. In April, affordability was at 16 percent.


The index is largely dependent on median home prices, which rose to $503,450 in May from $434,790 one year earlier, according to the CAR. In April, the median home price in L.A. County was $484,590.


The index assumes a 20 percent down payment with a mortgage rate of 5.85 percent.


Statewide, 16 percent of the population could afford to buy a home, down from 19 percent in the year-ago period and 17 percent in April. The median home price statewide in May was $522,590, versus $463,320 a year earlier and $509,630 in April.


A homebuyer in California must now earn at least $122,690 nearly $14,000 more than last year in order to afford a median priced home.


Homes in the High Desert, which includes Palmdale and Lancaster, were the most affordable, with 33 percent of households qualifying, followed by Riverside/San Bernardino at 20 percent. Santa Barbara was the least affordable region, where just 6 percent of its residents could afford a median-priced house. The most expensive homes were on Santa Barbara’s South Coast, where an average home went for $1.2 million.


Nationwide, the median home price was $207,000 in May.

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