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Californians boost real estate purchasing power

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Some 59 percent of California households had sufficient income in the fourth quarter of 2008 to buy an entry-level home in the state, up sharply from 33 percent a year earlier, according to data from the California Association of Realtors' First-Time Buyer Housing Affordability Index. The index found that a minimum household income of $48,900 would buy a starter home at $248,030 in the fourth quarter, based on an adjustable interest rate of 6.02 percent and assuming a 10 percent down payment. The monthly payment including taxes and insurance was $1,630 for the fourth quarter. At $48,900, the minimum qualifying income was 42 percent lower than a year earlier when households needed $83,700 to qualify for a loan on an entry-level home. Recent decreases in home prices and mortgage rates have brought affordability into better alignment with income levels of the typical California households, where the median household income is $59,160. At 76 percent, the High Desert region wa...