Industry News

Californians increase real estate buying power

24% of households could afford $394,300 median home price in February

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The percentage of households in California able to afford a median-priced home inched higher to 24 percent in February, up 1 percentage point from January, but down 6 percentage points from the same period a year ago when the index was at 30 percent, according to a report released today by the California Association of Realtors.   The minimum household income needed to purchase a median-priced home at $394,300 in California in February was $91,690, based on a typical 30-year, fixed-rate mortgage at 5.74 percent and assuming a 20 percent down payment. This was down from the $94,020 minimum household income necessary to afford a home in January 2004, when the median price stood at $405,720, but up from $77,220 in February 2003, when the median price of a home was $326,640 and the prevailing interest rate was 5.93 percent.   The minimum household income needed to purchase a median-priced home at $168,100 in the United States in February 2004 was $39,090.   At 55...