Housing affordability in California dropped several notches from October 2004 to October 2005, the California Association of Realtors reported Thursday.
The percentage of households in California able to afford a median-priced home stood at 15 percent in October, a 4 percentage-point decrease compared to October 2005.
This October Housing Affordability Index was unchanged from September, when it also stood at 15 percent, the state Realtor group also reported.
CAR‘s monthly housing affordability index measures the percentage of households that can afford to purchase a median-priced home in California. CAR also reports housing affordability indexes for regions and select counties within the state.
The minimum household income needed to purchase a median-priced home at $538,770 in California in October was $128,480, based on an average effective mortgage interest rate of 6.03 percent and assuming a 20 percent down payment. The minimum household income needed to purchase a median-priced home was up from $106,490 in October 2004, when the median price of a home was $459,530 and the prevailing interest rate was 5.70 percent.
By contrast, the minimum household income needed to purchase a median-priced home at $218,000 in the U.S. in October 2005 was $51,990.
At 25 percent, the High Desert region was the most affordable CAR region in the state. The Northern Wine Country region was the least affordable in the state at 7 percent, the association reported.
The association is one of the largest state trade organizations in the United States, with more than 185,000 members.
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