Industry News

Californians lose real estate buying power

Household income needed to purchase median-priced home rises to $94,730 in December

The percentage of households in California able to afford a median-priced home dropped to 23 percent in December, down 5 percentage points from the same period a year ago, according to a report released today by the California Association of Realtors. The minimum household income needed to purchase a median-priced home at $404,520 in California in December was $94,730, based on a typical 30-year, fixed-rate mortgage at 5.82 percent and assuming a 20 percent down payment. The minimum household income needed to purchase a median-priced home was up from $81,290 in December 2002, when the median price of a home was $338,840 and the prevailing interest rate was 6.1 percent. In contrast, the minimum household income needed to purchase a median-priced home at $173,200 in the United States in December 2003 was $40,560. At 57 percent, the High Desert region was the most affordable region in the state, followed by the Sacramento region at 36 percent. The Northern Wine Country and San Die...