Industry News

Fewer Californians able to afford real estate

One needs $109,670 income to buy median-priced home in state

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The percentage of households in California able to afford a median-priced home stood at 19 percent in November, unchanged from the previous month, but down 6 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 $473,260 in California in November was $109,670, based on an average effective mortgage interest rate of 5.7 percent and assuming a 20 percent down payment. This figure was up from $90,270 in November 2003, when the median price of a home was $384,470 and the prevailing interest rate was 5.85 percent. By contrast, the minimum household income needed to purchase a median-priced home at $188,200 in the United States in November 2004 was $43,610. At 40 percent, the High Desert region was the most affordable in the state, followed by the Central Valley region at 25 percent. The Santa Barbara region was the least affordable in th...