Industry News

Housing affordability plummets in California

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The median price of a single-family home in California is expected to rise 15 percent next year to $522,930, on the heels of a 22 percent rise in the median price from 2003 to 2004, the California Association of Realtors announced today. And housing affordability is expected to reach a record low in the state next year. "Home buyers next year will face slightly higher mortgage interest rates, approaching 7 percent by year's end, which will make it more difficult for many families in California to be able to afford a home," said Ann Pettijohn, association president. "Coupled with rising home prices, affordability in California will fall to an all-time annual low of 16 percent next year." The median price in the current year is expected to reach $454,720, and a shortage of housing is expected to fuel continuing increases in price appreciation. California typically gains nearly 250,000 new households each while building about 200,000 new housing units this year, the association reported....