Industry News

California real estate affordability falls

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An affordability index produced by the California Association of Realtors trade group held steady from November to December but was down 5 percentage points since December 2004. The percentage of households in California able to afford a median-priced home stood at 14 percent in December, compared with 19 percent for the same period a year ago, the group reported today. C.A.R.'s monthly housing affordability index measures the percentage of households that can afford to purchase a median-priced home in California. C.A.R. also reports housing affordability indexes for regions and select counties within the state. The minimum household income needed to purchase a median-priced home at $548,430 in California in December was $134,200, based on an average effective mortgage interest rate of 6.33 percent and assuming a 20 percent down payment, C.A.R. reported. At 24 percent, the High Desert region was the most affordable C.A.R. region in the state, followed by the Sacramento region at 19 pe...