Industry News

Three-fourths of first-time buyers can’t afford California home

State Realtor group releases new affordability index

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About 23 percent of first-time home buyers in California were able to afford a median-priced home in second-quarter 2006, compared with 30 percent in second-quarter 2005, according to a new index developed by the California Association of Realtors. C.A.R.'s First-time Buyer Housing Affordability Index measures the percentage of first-time buyer households that can afford to purchase a home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state. The Index is a measure of housing well-being for first-time buyers in the state. The minimum household income first-time buyers needed to purchase a home at $482,000 in California in the second quarter was $98,720, based on an adjustable interest rate of 6.48 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $3,290 for the second quarter of 2006...