Industry News

California housing out of reach for first-time buyers

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A new report released by an industry trade group found that only 24 percent of California households could afford to buy an entry-level home during the second quarter. Although the percentage is up slightly from 23 percent for the same period a year ago, the California Association of Realtors' First-time Buyer Housing Affordability Index found that homes today are more expensive and require buyers to have higher minimum incomes than they did a year ago. The minimum household income needed to purchase an entry-level home at $504,080 in California in the second quarter of 2007 was $101,550, based on an adjustable interest rate of 6.29 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 $3,380 for the second quarter of 2007. This is compared to the $98,720 minimum annual income needed to buy an entry-level home in the second quarter of 2006 at $...