The percentage of households that can afford to buy an entry-level home in California was 44 percent during the first quarter, compared with 26 percent for the same period a year ago, according to a report released Tuesday by the California Association of Realtors.
The report said the minimum household income needed to purchase an entry-level home at $356,350 in the state was $67,830, based on an adjustable interest rate of 5.65 percent and assuming a 10 percent down payment. The group also estimated that the monthly payment including taxes and insurance was $2,260 for the first quarter.
“The minimum qualifying income was 30 percent lower than a year earlier,” the report said. “Recent decreases in home prices and mortgage rates have brought affordability into better alignment with income levels of the typical California household.”
The First-time Buyer Housing Affordability Index rose 11 percentage points in the first quarter of this year compared to the fourth quarter of 2007 due to a 0.56 point decrease in the mortgage rate and a 14.3 percent decrease in the entry-level median home price.
At 64 percent, Sacramento County and the High Desert region were the most affordable areas in the state while Monterey was the least affordable at 29 percent followed by the Bay Area at 30 percent.
The Business Journal reported last week that sales in L.A. County for the month rose about 15 percent over March as the median price slid 2 percent to $456,000, according to data provided to by Melville, N.Y.-based HomeData Corp.