Industry News

Record-low housing affordability hits Golden State

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The percentage of households in California able to afford a median-priced home fell to 16 percent in July, down 3 percentage points from a year ago, while affordability in three regions fell to new lows, according to a report released today by the California Association of Realtors. The July Housing Affordability Index was unchanged from June, when it also stood at 16 percent. The state's regions with record-low affordability conditions in July included Los Angeles, with just 14 percent of households there able to buy a median-priced home of $543,890; Riverside/San Bernardino, with 15 percent able to afford a $384,910 price tag; and the High Desert, with 30 percent able to buy a $298,950 home. The minimum household income needed to purchase a median-priced home at $540,900 in California in July was $125,670, based on an average effective mortgage interest rate of 5.73 percent and assuming a 20 percent down payment. This income figure was up from $109,170 in July 2004, when...